The largest trading platform in crypto currency (BINANCE ) has gone through a painful experience. A hack on the Binance Smart Chain. Something that should never happen in crypto in a truly decentralized network.
A creation of the 2million BNB tokens by the hacker, of a total value of $570 million. The value of 1 Binance BNB token represents +-270 us$.
Whatt? Hard to believe, and yet possible. How come?
The hack took place on the cross-chain bridge where users transfer digital assets from one blockchain to another. The hackers were able to create 2 million BNB tokens out of thin air. The attacker was able to detect a vulnerability in the Binance Bridge, thus sending BNB tokens to themselves. This due to a bug in the smart contract that allowed hackers to forge transactions and transfer funds to their account.
What can Binance do now to resolve this matter ?
Freeze the hacked funds, or maybe not freeze them, and using ID tagged tokens to blacklist them.
Using BNB Auto-Burn to cover the remaining hacked funds, or not? So that the number of rotating BnB tokens comes to the same number already before the hack.
Whitehat program for future bugs found by computer hackers with good intentions worth 500 000$ to $1 million per "bug" found.
A sort of "reward" for the hackers, up to 10% of the funds recovered. This would be negotiable if the hackers are of good character. Source : https://www.bnbchain.org/en/blog/bnb-chain-ecosystem-update/
Binance, has suspended deposits and withdrawals because of a hack. In other words, the blockchain was shut down. This is not so difficult since the BNB network only has 44 validators of which 26 are active. This sounds lol "centralized" to me. Validators do the processing of all transactions as well as the approval.
Because of these actions, all existing funds are safe until further notice. This is the most important thing for all BNB token holders, of course.
The hack may inspire future testing for similar vulnerabilities of other blockchain networks, namely on the cross chain bridge.
Indeed, Chainalasys has confirmed in that about $2 billion in crypto has been lost through cross-chain bridges. This theft has occurred over 13 different cross-chain bridge hacks.
This event does add a bit more uncertainty for the crypto market as a whole.
We should also not forget the collapse of TerraLuna network along with on their dollar pegged token. This was attacked, I believe, by the existing major forces in the world of finance, especially Blackrock & Citadel investment group, which invested in another dollar version, namely USDC. Strange but true, it is now just the same timing of the Binace hack, that USDC was removed from the trading pairs with Binance, as they have their version of the dollar as well, namely the BUSD. The danger of the fall USDT (tether) is also still around the corner.
A good video from Coinbureau, regarding the BlackRock & USDC connection can be found here. https://youtu.be/H_jGGSpjUbw
It has already been a difficult year already in crypto, as well as for the stock markets coupled with new regulations and sluggish economy due to the corona story.
Still, we could argue that crypto should be independent of economic issues or corelation to the stock market. Better yet, it should be a hedge against inflation as well as a "tool" for redefining economic models.
Long term vision in my opinion is and remains : A shelter system for moving value ( financial products ) and an ecosystem for the structure towards new economic models.
Maybe is still too early for this, since still with weak networks, a manipulated market and crypto's that only have a speculative value.
The most important thing is and remains, true decentralization.
Digibyte, Bitcoin, Monero are also still good examples of true decentralization. Zilliqa is another great example with their "sharding technology" that solves the scaling problem in a decentralized way.
The important thing is to learn about crypto before investing, and to do so very gradually, learning by doing. Long term vision and "security" are 2 super important.
We don't want you to lose your hard-earned money. Holding on to value is equally important.
For now, serious investors are willing to wait, because they are very bullish on the long term. As well as regulation & real economic implem