Web3 security is becoming increasingly vital as the technology gains traction in the current year. Cybersecurity audit firms are working tirelessly to combat the rising threats posed by bad actors in the industry. The flow of capital worth billions into the web3 domain has allowed developers the resources to build innovative solutions, but it has also opened the door for illicit activities to capitalize on the cash influx.
One of the main concerns surrounding web3 security is the irreversible nature of transactions. In web3, users have full control of their assets with phrases like ‘your keys, your coins’ and ‘your keys, your NFTs’ being central to the philosophy. This decentralized approach conflicts with traditional security measures seen in web2 platforms, where institutions enforce strict security protocols to protect users’ funds from fraudulent activities.
When comparing web2 to web3 in terms of security, it is evident that web3 poses a higher risk to users due to the irreversible nature of hacks. In web2, when a platform is hacked, users may temporarily lose personal information, but credit card companies can freeze cards, issue new ones, and refund stolen funds. However, in web3, hacks result in permanent loss of assets for thousands of users, highlighting the need for robust security measures within decentralized systems.
The Global Web3 Security & AML Report 2022 revealed that web3 experienced over 167 significant attacks, resulting in a total loss of $3.60 billion. These attacks led to a significant dent in the financial market, with ten security incidents losing over $100 million in a single attack. Despite efforts to mitigate these risks, the first half of last year alone contributed more than $2 billion to hacks and exploits in web3 projects.
To counter illicit operations and enhance security within web3, cybersecurity audit companies have taken steps to reduce bad actors’ impact. Leading firms such as Hacken have seen rapid growth and increased revenue while ensuring that zero smart contracts audited by their team were hacked. Additionally, the creation of hDAO marks a crucial step towards merging the interests of stakeholders and enhancing security within web3.
As web3 continues to expand with the support of various platforms, security remains a critical aspect of its further development in 2023. From gaming to music giants like Warner Music Group, many organizations have embraced web3, prompting employees to make the switch to this innovative space. A secure web3 environment not only fosters innovation and growth but also aligns with regulators’ efforts to ensure compliance and security within the blockchain industry.
Discussion about this post