Bitcoin Forum

Reason number 1007 why I don't want anything to do with altcoins or defi nonsense. They are a hackers wet dream.
Tens of millions of staked assets were also lost or hacked from Blockfi, Celsius, etc.

Seems to me ethereum staking (through which you have no self-custody) would be the next big juicy target for hackers.
Which is why proof of stake is horribly risky and unsecure imo.

Records have it that the amount of money lost to scammers and hackers through defi in 2022 alone is more than the total amount stolen in both ICOs-IEO and other hypes put together.

The major reason why we should avoid the hype and concentrate on potential projects that have long-term value traction and market value that make it impossible to be manipulated.

Because most of that Defi hacks and scams are insider jobs, the majority of them are perpetrated by the team themselves, in the form of exit scams.

Or just in general, do not trust these projects that can potentially ruin your finances once they got the opportunity. Most of the DeFi hacks were perpetrated by the team of the project themselves, and in order for anyone to not be a victim, they better think thrice before investing their money into similarly schemed investments in the crypto space.

Honestly, I don't find PoS risky, only if you have the funds yourself in your own wallet. But the moment you hand them over to someone to 'multiply' whatever you have right now, that's the time you have screwed up and there is a high chance that the scam is going to happen any time soon.

Not your keys, not your coins.

Agreed.  Staking on these shaky platforms for high yield is too good to continually pay off.  There is no way I'd stick my money in most of these things either.  Greed will catch up to everyone and the amount of crypto that is scammed or stolen will continue because greedy actions breeds dumb decisions.  Buy, hodl, go outside 😀

I do not think that this is the reason. If you look more closely, you will find that there is not a single case of hacking due to the Proof of Stake system, or that there are no obvious flaws in the system.

The problem is with bridges, tokens, decentralized platforms, and central Bitcoin networks that claim to be decentralized. All of these networks have poor programming and are therefore easy targets for hackers.

$1.4 billion of $3.8 billion is from bridges Hackers have stolen $1.4 billion this year using crypto bridges (https://www.cnbc.com/2022/08/10/hackers-have-stolen-1point4-billion-this-year-using-crypto-bridges.html#:~:text=Bridge%20hacks%20have%20resulted%20in%20more%20than%20%241.3%20billion%20stolen%20in%202022&text=%E2%80%9CBlockchain%20bridges%20have%20become%20the,firm%20Elliptic%2C%20in%20an%20interview.)

We had been hearing several news on how hackers have been stealing from exchanges and investors making them to lose heavy in cryptocurrency. This will continue until the government would intervene with different ways to catch crypto theft and get them apprehended.
Most of these events happen because of lack of cryptocurrency safety by users and exchanges as a result of loopholes. Safety should always be paramount to whatever we are doing whether linking our wallet to sure or transacting cryptocurrency.

I don't understand how ETH's Proof of stake has anything to do with some random smart contract exploits or cross-chain bridge hacks. But maybe you can explain.
And since you talk about altcoins specifically i am sure you don't want anything to do with bitcoin's taproot DeFi potential either or is that just different kind of nonsense?
Not to mention the exploits in Bitcoin's lightning network (https://protos.com/researchers-discover-critical-bitcoin-lightning-network-vulnerability/).

The funny thing is, not all of this was "hacked", some of them were just willingly given to them, and they just took it. Like for example all those situations where someone creates a fake token, and convinces people to invest because it is going to be this huge thing, and then they just take the money people gave them and run with it. In any case, I still think 3.8 billion could be a bit of a wrong number, it could be a little lower than that, but I believe its still a very important part of crypto we need to be careful about, it can't be really good for everyone in the market if we keep getting hacked like this.

They are working very hard just to hack exchanges and projects that has a weak security, and most of this projects are also a scam one. We cannot generalize the whole altcoins with this, there are still good projects where you can trust and put your money, all you have to do is to analyze properly and invest what you can afford to lose, hackers are getting wiser as well and we should not be intimidated by this and just do our best to protect our crypto.

The problem is how are you supposed to know which one is safe? Everyone thought Terra Luna was a safe bet until it crashed and went to zero.

You're basically gambling on these altcoins. 99% of them are unregistered securities. They are controlled by a small group of insiders, they had an ICO with VC venture capital investors, etc. The point of bitcoin is that it isn't controlled by anyone. There was no premine or ICO.  Bitcoin has stood the test of time. Proof of stake is a new and unproven technology. No one knows how secure it is or isn't at this point. But the consensus among the experts appears to be it is significantly less secure than PoW.

Which is why I never understood the hype around FTX and Bankman-Fried who was promoted in the media  as this amazing new face of crypto. This guy just came out of nowhere, with no track record  to speak of and all the sudden he is the new king of crypto? I never trusted him because I don't know him, he has no history. At least with Binance and Coinbase, Kraken, etc. these are established players with a relatively good reputation. So SBF probably bribed the corrupt mainstream media to promote him as the God of Crypto. It's very suspicious.

We know that a market does involved huge chunks of money or simply involving millions or not billions of dollars then it would be understandable that it would be a honeypot for them and since those past hacking methods and moduses back in the past had already been busted and been known but we know that hackers are becoming even more intelligent and wise which it would really be normal that they would really be making
new methods and ways that havent been done before so that they would continue to victimized investors and get those huge money.For platforms then they would really be trying out their
best to find up holes and exploits and this is why we do still continue to see up these probabilities.

And as much as we have been calling for this project to tighten up their code so that there will be no exploits, hackers are one step of the game. So yeah, definitely this might continue till they fix their bugs and everything.

Bu the toll has been taken, billions worth of money are being stolen by this cyber criminals in crypto.

And if I'm not mistaken, rouge nation such as North Korea are on the top, they even have dedicated group called Lazarus or APT to do this hackings from crypto exchanges to altcoin projects. So it's really a dangerous world out there. And as a investor, it's better to stay away or just focus your money on projects that are solid like Ethereum or Bitcoin.

and don't forget that i believe some of them are inside job. who knows the code very well? the dev team themselves, right? so sometimes i don't buy the idea that a certain small project was hacked, because high likely, the dev team themselves wanted to claim they were hacked, but the truth is, they just want to pocket the money of their investors.

And this is a problem, whenever someone reveals data about how much money it has been stolen by hackers someone suggest that investors need to do a better job when it comes to selecting the altcoins in which to invest, but when there is only a handful of good projects and thousands of scams then the only winning move is to not play, only bitcoin and ethereum are strong enough to not disappear overnight, but if you only invest in them then you get accused of being a maximalist, as if there is anything wrong with being a maximalist in this market.

PoS exposes you to counterparty risk. When a custodian such as Blockfi or Celsius goes bankrupt you lose all your staked assets including staked ethereum since you have no custody.

The bitcoin lightning network exploit is hypothetical, but its a good thing when people discover a potential threat so it can be addressed before it becomes real.

Staking in the context of PoS and centralized crypto lending has two different meanings.

When you "stake" with companies like BlockFi or Celsius, you're simply lending them your crypto assets. This means that the company holds your assets and as you mentioned, it exposes you to counterparty risk. However, in the context of a PoS blockchain like Ethereum, in very simple terms, staking refers to holding onto a certain amount of coins to validate transactions. In this scenario, you are in control of your own coins, acting as a network participant, and incentivized to maintain the integrity of the network.

In the past, there were too many hacks related to De-Fi and the trends that have become popular. As for the ETH's turn to POS, it will mainly be focused on where these ETH have been staked. As for its network, yeah, it's arguably lesser secure than PoW which has been said to be better in terms of security. The platform where you'll be staking your ETH will be responsible one of keeping its platform safe. This is the hardest part where you got to be more resourceful and be researchful before you entrust that ETH for staking unless you just want to keep it on your own.

Why blame the consensus being used when there is a hack around? Its quite offensive on PoS project especially PoS hasnt have much that problem with their usage. Its the token platform, or token smart contract that being used are the one that has problem and flaws which resulted to being hack. Especially bridges from one coin to another.

I doubt eth PoS will be targeted and for God's sake its the number 1 platform on altcoin, Im sure they made their secuirity adjustment towards silly hackers.

DeFi hacks [history]
https://bitcointalk.org/index.php?topic=5267124.0

Basically, statistics count only stolen funds, but do not take into account their return. In Defi, the tendency to return stolen funds has long been increasing.

Losses not only in defi projects, but also as a result of hacking with the help of viruses, exploits, phishing.

Exchanges are also being hacked, EXBITRON EXCHANGE was recently hacked.

FTX and Alameda lost billions in fraud, but people are more interested in DeFi hacks.

Hmm i don't really think that altcoins are nonsense. For me it was Ethereum with it's introduction of smart contracts that made crypto as big as it is today. If we would still only have Bitcoin today, then the price of one Bitcoin would probably still be way below 1000$ because Bitcoin alone would have never reached the masses and mainstream adoption.
Of course when a product or a software has a lot of functionality and different applications then this also means that hackers have multiple possibilities to try to get access to those software. I still think though that Defi will be the driving force for the whole crypto market in the next years.

It is probably more then this. If we consider the amount of people that have invested in altcoins and the devs have vanished after getting the money. I think we are probably over 10 billion losses. This is not a good look on cryptocurrencies and it is annoying that people are just out to get profit instead of trying to promote cryptocurrencies in a positive way. Some of these hacks were intentional and done by inside jobs instead of a person on the outside gaining access and I do not think they can be called 'hacks'

Rug pulls, hacks and scams, everyone is losing and it could be in tune of billions upon billions every year.

So this is the start of 2023, and sooner or later we will hear another bad news in the altcoin market including hacks from cyber criminals and I don't see it stopping anytime soon.

We may say that this is also part of the ecosystem, and as much as we don't want to hear this kind of news, definitely we might hear it again and again.

Scammers whether we like it or not are are always going to be part of any ecosystem where money is moving, and with this in mind we need to do what we can to protect ourselves, and this is even more true in this market because on the fiat system banks can protect investors partially from their mistakes, but this is not possible on this market in which we are fully responsible for our money, which is why it surprises me there are still so many people willing to invest in altcoins when many of them are created by scammers.

Yes, the lack of regulation of the circulation of cryptocurrencies by states has its negative side. Cryptocurrency is now very much attracting the attention of various hackers and scammers. Large sums of money are concentrated here, and relative anonymity and the Internet give them a good opportunity to hide after the thefts. This kind of crime is very poorly disclosed, even if law enforcement agencies would be interested in it. But states and their bodies are not in a hurry to restore order and bring fraudsters to justice. Therefore, relative impunity is an additional incentive for fraudsters.