Hacking in Crypto: Cutting-Edge Cybersecurity Measures

Cybersecurity has become one of the biggest threats of our time, with about 7% of the world’s economic output at risk of being stolen. Blockchain technology is one solution, which is why so many new blockchain startups have appeared on the scene to tackle the issue of cybersecurity, but is that enough? Which ones are actually effective?

Looking at the most protected systems in the world – such as supercomputers employed by the U.S. military – we know that real solutions exist, but they’ve been neither affordable nor accessible to the general public. Blockchain startups have been bridging the gap, with one in particular catching the attention of some of the world’s largest tech giants.

For companies putting sensitive information on blockchains, anything not on said blockchains are still at risk.

Cryptocurrency exchange markets and mining companies have proven to be at real risk of security breaches. According to a study by Tyler Moore, about a third of all cryptocurrency exchanges have been hacked since 2009, and the total stolen in cryptocurrency already amounts to over $15 billion.

Here is a timeline of some of the biggest attacks to date:

  • Japan’s Mt. Gox was hacked in 2014 and 650,000 bitcoins were stolen. Today, they are worth about $9.4 billion dollars.
  • Bitfinex, a Hong Kong-based exchange, was hacked in August 2016. About $70 million worth of cryptocurrency was stolen, today worth $1.7 billion.
  • Cryptsy was hacked in July 2017 and 11,325 bitcoins were stolen, today worth over $100 million.
  • Kraken was also hacked in July 2017, leading to a loss of about $5 million.
  • Tether was hacked in November 2017 with cryptocurrency stolen worth over $31 million dollars.
  • Nicehash was hacked in December 2017 and about 4,700 bitcoins were stolen, worth about $68 million.
  • Coincheck, the self proclaimed “leading cryptocurrency exchange in Asia”, was hacked in January 2018 in the biggest heist to date, losing $530 million of users’ cryptocurrency.
  • BitGrail was hacked most recently in February 2018, with the stolen cryptocurrency valuing $170 million dollars.

This doesn’t just affect cryptocurrency exchanges. According to the National Cyber Security Alliance, one in five small businesses fell victim to cybercrime in 2015. About 60% of such firms go out of business within six months of such attacks.

By 2021, cybersecurity breaches are estimated to have cost over US$6 trillion, up from $3 trillion in 2015.

The best place to look for working cybersecurity solutions is within the government and military. Federal supercomputers must be protected and functioning at all times, so it makes sense that they would fund extensive research and development. Previously, these technologies have not been available, but through crowdfunded token sales, that has begun to change.

The U.S. Navy, Homeland Security, Northrop Grumman, and Lockheed Martin all use MTD (moving target defense) technology developed by the world’s leading researchers and computer scientists at George Mason University. Those same researchers are now endeavoring to make MTD cybersecurity tech available to the public.

Knowing that attacks are inevitable, researchers created MTD technology to provide two major functions: limit the window of opportunity for cyber attacks, and limit the damage incurred when an attack does occur and the system must be able to repair itself almost instantaneously.

In the best example of MTD technology, different versions of servers rotate on a minute-by-minute basis. Instead of 3-4 months of access time, intruders get a single minute. With 5 servers online and 3 offline at all times, the servers rotated into the offline position are scanned for damage, allowing threats to be detected and cleansed. It’s a literal self-healing moving target.

In the blockchain community, the first step is making decentralized hosting more resilient. Hosting a file in a decentralized manner requires a ledger and data to be shared and encrypted. This data is then stored on millions of devices all over the world. The only thing that can bring the shards together is the ledger. In case the ledger is offline or corrupted, the data is not retrievable. MTD tech can keep this ledger constantly online and uncorrupted.

This also allows for the validation of certain processes and states. The core of this technology is the controller (which controls the rotation) and the pristine state of servers. Using blockchain technology, individuals validate the cleanness of these virtual machines by comparing the pristine state of the server to the actual and are rewarded with digital tokens for threats and damage located.

Currently, there are about five notable MTD cybersecurity startups, though to date, only R3sec has the distinction of working directly with the aforementioned federal agencies and has contracts in the works with Amazon Web Services, Google Cloud, IBM Cloud, and HP.

While cyber threats will never cease to exist, MTD technology provides the most effective means of thwarting hackers.
That’s why investors are getting in on cybersecurity startups, particularly those few offering MTD solutions. Moving target defense technology may just be the paradigm shift in cybersecurity that enterprises need to stay afloat in the increasingly high-stakes field of cyberwarfare. It’s definitely an emerging technology worth looking into further.