The year of 2018 saw cryptocurrency users and enthusiasts lose a lot of money. The year started off with a crypto market cap of over $800 billion and is ending it off with just $130 billion.
There’s no doubt the bear market has been strong and for those who refused to sell, they are most likely underwater. However, despite the massive sell off, there are people who profited well during these harsh market conditions.
These people either sold the top, shorted the tops, longed the dips, or successfully hacked software to find blockchain bugs.
For those of you who don’t know, hacking can be a very profitable business even when performed legally. According to stats from breach disclosure platform HackerOne, crypto hackers have netted $878,000 this year alone.
Security in the Blockchain Ecosystem
While many tout blockchain and cryptocurrency for their strength and security, much of the software and technology is still very new. Users have lost millions of dollars to hackers exploiting bugs in the code and two of the largest and most famous hacking events involved two cryptocurrency exchanges, Mt. Gox and Coincheck.
Following these hacks, crypto exchanges, wallets, and services held bug bounty programs that rewarded hackers for finding software bugs in their systems. They did this to improve safety standards and to ensure they keep customer funds safe and secure.
According to TheNextWeb, blockchain companies received at least 3000 vulnerability reports this year and roughly $600,000 in bug bounties already issued by August.
Further reports from HackerOne reveal that nearly 4% of all bug bounties paid out from the platform this year came from cryptocurrency and blockchain related companies. What’s more interesting is that these types of companies only totalled 64 out of the 2000 companies a part of the platform and they yielded the highest payouts.
A HackerOne spokesperson further revealed:
The average bounty for all blockchain companies in 2018 was $1490, that is higher than the Q4 platform average of around $900. One of the top paid crypto hackers earned 7X the median software engineer salary in their country respectively.
Largest Bug Bounty Payout
Though HackerOne hosts 64 crypto and blockchain companies on their platform, only 1 company manages over 60% of the bug bounties paid out. Block.one, the company behind crypto project EOS awarded hackers $530,000 in 2018.
Block.one’s hacker program launched in May, and shortly after one hacker received $120,000 in bug bounties.
Notable Bugs Found in 2018
They call Bitcoin the most secure and trusted blockchain there is as it has been around for 10 years now. However, this year someone discovered a critical bug with crippling capabilities in Bitcoin’s core code in which could have been used to inflate Bitcoin’s supply to above 21 million.
Surprisingly enough, Bitcoin’s bug was discovered by a Bitcoin Cash developer, Awemany who pointed it out to Bitcoin developers where they quickly fixed the vulnerability.
Another notable bug, this time for Bitcoin Cash was a bug that allowed for the split of the BCH chain into two incompatible chains. Corey Fields, who works at MIT Media Labs’ Digital Currency Initiative (DCI) discovered this bug.
As for bugs on Ethereum, HackerOne reportedly stated that roughly 34,000 smart contracts on the Ethereum network were vulnerable to malicious activity. However, this number is not overly surprising considering the number of cryptocurrency projects built on top of Ethereum.
Do you think bug bounties are a good idea, or could they lead hackers to exploit vulnerabilities instead? Let us know what you think in the comment section below.