As we see the latest developments in cryptocurrency and blockchain technology, many applications aside from cryptocurrency have taken charge in the market. The concept of utilities has been adopted and applied in the digital sector to bring loads of innovation to the market. While cryptocurrency has been associated throughout the development of blockchain, another major issue came to light with the increasing adoption of cryptocurrency and digital means of payment. Not only did the investors get rich with the increasing use of cryptocurrency and its development, but hackers made off billions too, which came off by compromising multiple cryptocurrency projects and exchanges that came into increased use with the dynamic change caused by digital innovation.
The year 2021 and the year 2022 reported many cryptocurrency hacks, followed by an impact that was exceptionally damaging for the market as a whole. Although the year 2021 did follow up a good trail of hacks, with complete exploitation of $3.2 billion, the year 2022 was exceptionally damaging. Not only did the market observe the most prominent crypto hacks of the decade, but they also caused some wide-scale impacts.
The FTX collapse is the most significant cryptocurrency exploitation of the year 2022, bringing down the market to unimaginable bounds. While several other factors are associated with the decline of cryptocurrency, it is evident that such hacks came out as the final nail in the coffin. From the Wormhole’s exploit to the Nomad bridge’s breakdown, the collective hacking of more than $3 billion changed how the crypto market worked. Crypto winter was at large, and the investors were quiet about how the market was behaving. How does a crypto hack determine the market’s future in such cases?
Trust, which turns out to be an important factor in investments, is the only damaged entity that cannot be recovered after such exploits. The need to have control over the hacks is essential for the sustainability of the market, which is turning to become a global influence in the coming years. Whenever the cryptocurrency market reported a hack or exploitation worth a few millions, people feared their investments to go in vain under the speculations caused by such damages.
Where exchanges like Binance also faced a backlash amidst the developments of the market, the trust of the investor brought a downsizing reaction in the entire community. This is why cryptocurrency hacks are believed to be much more important in the future of blockchain and cryptocurrency.
How should the market consult the solution to such a problem? Adopting blockchain security protocols designed by valued market leaders is the solution to the sustainability of the entire digital innovation. Web3 companies working and designing different blockchain security protocols should be empowered to protect the investor’s trust, which determines the market’s reaction as a whole. Cryptocurrency hacks have a significant impact on the market, and the only solution to avoid all consequences is by tackling them with planned developments in blockchain.