Cryptocurrencies are rapidly rising in popularity, but so is hacking.
Key details
Cryptocurrencies are all the craze right now. Millions of people have money in the crypto market and it is now gaining popularity in the sports world with many celebrity endorsements.
With the rise in popularity also comes the rise of hacking threats. Crypto security firms are finding themselves booked and busy to help protect cryptocurrencies from hackers. Roughly $2 billion has been stolen in crypto this year from hackers, according to researcher Chainalysis.
Despite cryptocurrencies experiencing a rough few months facing selloffs and layoffs, crypto security is booming and is boosting hiring and raising prices.
Why it’s news
When dealing with so much money in the crypto space security services are becoming a necessity, even for startup businesses. Investors are taking note of the growing demand for protection. Venture capital firms have poured $257 million into crypto auditing and security companies so far this year, up from $185 million for all of 2021, according to CB Insights.
These crypto security businesses focus on searching through codes for weaknesses and making sure no bugs exist within the sites to ensure hackers can’t steal the cryptocurrencies.
One major way hackers have been successful is with crypto bridges. A crypto bridge is something that allows a crypto coin developed for one blockchain to be used on a different one. Hacks on crypto bridges accounted for more than two-thirds of the total value stolen in the first seven months of 2022, says Chainalysis.
In March, $600 million worth of cryptocurrencies were stolen by hackers from the Ronin Bridge connected to a popular online game called Axie Infinity. Sky Mavis, the developer of Axie Infinity, was forced to compensate players who lost money, according to Barron’s.
With the rise of hackers in the industry, crypto security companies don’t seem to be slowing down in the near future.
Backing up a bitJune and July were brutal months for cryptocurrencies. Bitcoin dropped 37.3% in June alone, giving it the largest fall since 2011. The major sell-off led to job cuts in many crypto companies and even forced some lenders to pause withdrawals. Nevertheless, Bitcoin And other cryptocurrencies are on the rise and looks to be staying that way.
