First – let’s talk about what a bridge is. Compatibility and interoperability from one blockchain to another is still an issue. A bridge is basically a way for two different blockchains to convert tokens from one to another.
For example, if you want to send Bitcoin ($BTC.X) to someone but they can only accept Cardano ($ADA.X), that person is kind of up shite crick because you can’t send your BTC to a Cardano wallet. Sure, you could sell the BTC and get ADA, but there’s a cost involved.
Bridges act like a middleman of sorts, providing an easier way to convert and send receive from one network to another. That’s not much of an explanation, but it’s something you can read about in a future Crypto 101 article.
But here’s the problem with bridges: apparently, their security sucks.
If a blockchain is a gated community where everything is organized, and you have security guards and cameras and can’t enter and exit willy-nilly, then a bridge is like a McDonald’s ball pit. Only a little plastic mesh keeps the screaming kids and toddlers from throwing multi-peed on plastic balls around a public eating area.
And exploits and/or hacks of bridges have generated some of the biggest cryptocurrency losses in history:
- $611 million from Poly Network in August 2021
- $320 million from the Wormhole hack in February 2022
- $200 million from the Nomad hack in August 2022
So how often does the industry need to be hacked via bridges before they get better, or do people just stop using them? What will it take? Because another bridge exploit occurred on Thursday, this time hitting Binance’s BNB token.
Long story short, the cross-chain bridge BSC Token Hub linking with Binance Chain ($BNB.X) was exploited to the tune of 2 million BNB tokens – roughly $570 million. However, CZ (Binance’s CEO) stated during a live interview on CNBC’s Squawk Box that the damage has now been limited to under $100 million.
BNB Chain was previously halted but is now back up and running. 🤒