Blockchain technology is known for its strong built-in security. But let’s face it—where there’s money, there are hackers. And while blockchains are decentralized and tamper-resistant, they’re not bulletproof.
In this lesson, we’ll break down the major security risks in the crypto world, explore some high-profile hacks, and look at why protecting your assets in Web3 requires more than just good tech.
Blockchain Is Secure—But Not Invincible
Despite being designed for trustless and decentralized transactions, blockchains can still be attacked. The explosion of decentralized finance (DeFi) and smart contract platforms has opened new doors not only for innovation—but also for cybercrime.
In fact, 76% of all DeFi-related breaches happened in 2021 alone, according to cybersecurity firm Atlas VPN. And the trend hasn’t slowed down since.
Let’s look at the five most common types of blockchain attacks:
1. 51% Attacks
This happens when a group gains control of more than half the blockchain’s computing power. They can then rewrite the network’s transaction history, enabling double-spending. It’s like rewriting the rules of the game mid-match.
2. Backdoor and On-Ramp Exploits
Hackers hijack devices connected to the blockchain to mine crypto or steal sensitive data. Think of it like an attack on the supply chain—only digital and decentralized.
3. Flash Loan Attacks
A smart contract is manipulated to borrow massive funds without collateral, exploit price differences, and escape with profits—all in a single transaction.
4. Rug Pulls
Scammers create hype around a token, attract investors, then vanish with the funds. It’s one of the fastest-growing forms of fraud in Web3.
5. Phishing & Insider Attacks
Some of the worst breaches involved stolen keys or manipulated employees. In 2017, a single staff member’s compromised computer led to millions in losses on Bithumb exchange.
Other Threats You Should Know
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Private Key Theft: In 2016, over $73 million was drained from Bitfinex using this method.
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Unregulated Environments: Lack of legal clarity lets criminals operate with minimal risk.
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Exchange Vulnerabilities: In 2018 alone, over $1.5 billion in crypto was stolen from platforms using phishing and wallet hacking.
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Bitcoin Heists: Up to 5% of all BTC has been lost to exchange hacks, including Mt. Gox ($350M) and Bitfinex ($72M).
The Biggest Blockchain Hacks So Far
Let’s look at some jaw-dropping incidents from 2021 and 2022:
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PolyNetwork (2021): $600 million stolen in a DeFi hack—one of the largest in history. Interestingly, 99% of the funds were returned, and the hacker was offered a job.
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Cream Finance: Hit three times in 2021, losing a total of nearly $200 million.
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Liquid Exchange (Japan): Lost $97 million and had to halt all deposits and withdrawals.
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bZx Protocol: A phishing attack led to $55 million in stolen assets after developer keys were compromised.
2022 brought even more damage:
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Ronin Network (Axie Infinity): $610 million stolen through a validator exploit.
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Wormhole Bridge (Solana): $334 million lost due to a flaw in signature verification.
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Binance Smart Chain (Qubit Finance): $80 million was exploited using fake collateral.
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NFT Thefts: Discord became a playground for NFT phishing schemes and rug pulls.
Total Damage So Far
According to Chainalysis and other security watchdogs, more than $12 billion has been stolen from the crypto industry in the past decade. Most of that damage occurred from 2020 onwards—especially in DeFi.
And it’s not just about money. These attacks damage trust, slow down adoption, and highlight the need for better protection across the ecosystem.
What This Means for the Future
The crypto industry is still young. Hackers are evolving. And companies—especially DeFi startups—are still catching up with security best practices. Going forward, we’ll need better smart contract audits, clearer regulation, and stronger user protection tools.
But one thing’s clear: blockchain may be decentralized, but security is everyone’s job—from developers to investors to everyday users.
