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The advancement of computing power over the past few decades has been extraordinary. As computers become more powerful, hackers gain access to more sophisticated tools to launch attacks against crypto platforms. The threat of quantum and AI-driven hacks will soon be a major challenge for crypto entrepreneurs and developers.
Web3 hacks are one of the biggest challenges the industry is facing and a significant barrier to institutional adoption and mainstream usage. According to Cyvers’s data, more than $2.1 billion has already been stolen this year, with almost a quarter of the year still remaining.
Cybercriminals are always exploring new techniques to exploit their targets, and cybersecurity experts must stay ahead of them. This ongoing back-and-forth has shaped internet governance since its inception, and it has intensified as crypto has further intertwined finance with online technology.
However, this goal has become much more challenging with the emergence of new technologies. Quantum and AI hacking are gradually becoming the go-to methods for hackers, involving sophisticated data breaches and enabling access to previously impenetrable systems.
What Is Quantum Hacking?
Quantum hacking refers to using superior computing power to crack modern cryptographic algorithms. While crypto algorithms are theoretically “unhackable,” advancements in quantum computing have made it possible to break encryption techniques used by cryptographic platforms. Breaching secure cryptographic communications can result in serious security compromises.
The threat of quantum computing hacks is already upon us and will continue to grow as quantum computing systems evolve and become more widespread. Hackers have come a long way with traditional computing systems, but now their capabilities are set to grow exponentially.
Quantum Hacking and AI
Artificial Intelligence (AI) has been one of the most defining tech trends of the past two years. The rise of generative AI platforms like ChatGPT has captivated tech enthusiasts worldwide. AI presents remarkable opportunities but also serious threats, especially concerning data privacy and security.
It’s important to understand the broad scope of AI. This technology extends far beyond generative chatbots and encompasses automated features that traditionally relied on human intelligence. AI’s applications range from data-crunching tools and machine learning to speech interpretation and more. While this offers endless possibilities for innovation, it also becomes a double-edged sword when malevolent actors use AI to further their goals.
Moreover, the possibility of AI engines developing self-awareness and sentience remains one of the biggest “what ifs” of our time.
The Rising Threat
The threat of quantum hacks is clear for all to see. A recent report by the Hudson Institute estimates that future quantum hacks targeting global financial institutions or systems like FedWire could lead to an indirect GDP loss of $2 to $3.3 trillion—catastrophic damage to the global economy.
Hackers are constantly seeking new ways to compromise systems, and advanced methods like quantum computing are becoming increasingly feasible. While quantum computers are not yet widely accessible, their number is growing, and they’re no longer confined to Western countries.
AI, on the other hand, is accessible to nearly anyone. However, for ultimate hacking power, one must develop proprietary or semi-autonomous AI models that are free from the ethical constraints imposed by big tech companies. That said, most significant crypto hacks today are not conducted by small-time hackers but by well-funded organizations—sometimes even state-sponsored groups.
State-sponsored hackers, like North Korea’s Lazarus Group, are infamous for infiltrating highly secure systems. Most recently, the group was suspected to be the perpetrator of the $235M WazirX hack. These groups are far more likely to gain access to quantum processors and set up AI-driven hacking tools.
Weak Solutions for a Strong Problem
To stay ahead of these threats, crypto companies need new solutions. Cryptographic keys, which underpin encrypted communications, are not foolproof. However, quantum computing also offers security enhancements, such as Quantum Key Distribution (QKD), which detects eavesdropping attempts. But this is not enough to outpace the threat.
The combination of quantum computing and AI creates an almost infinite array of attack vectors. Since individual solutions only address specific vulnerabilities, there’s a need for more comprehensive, holistic defenses—especially to guard against “zero-day attacks,” which are unexpected and previously unknown hacking methods.
This requires innovative and proactive solutions that can address incidents in real-time, or even before they occur. Given the sophisticated nature of new-era hacking techniques, it is no longer sufficient to rely solely on pre-launch security measures like auditing, or passive threat intelligence tools that may respond too slowly to evolving threats.
Fighting Fire with Fire
If hackers can leverage AI, so must cybersecurity experts. Combating AI- and quantum-powered hacks requires AI-powered security tools.
One solution could be real-time monitoring and detection of cyberattacks through geometric machine learning patterns and anomaly detection that trigger prevention mechanisms. Companies taking a more pre-emptive approach can utilize address screening tools to assess the security reputation of smart contracts and wallets.
However, the ultimate solution lies in combining pre-emptive and proactive measures. For example, an AI-powered firewall that simulates transactions and validates them for malicious intent. Firewalls, which have long protected online systems, can be adapted for Web3 security, offering companies peace of mind against advanced hacking techniques.
These solutions reflect a broader shift in Web3 security toward more proactive, technology-driven products.
The Big Picture
Web3 security is a crucial aspect of blockchain platform management. The rewards for hackers are growing as the industry scales. With quantum computing and AI giving hackers unprecedented capabilities, crypto companies cannot afford to neglect security. They need advanced tools to combat this new wave of supercharged crypto attacks.
Authored by:
Michael Pearl is a seasoned executive in fintech and blockchain with over a decade of experience in business development and growth. Before joining Cyvers, he was the COO of Intentable and served as Director of Content at Finance Magnates and global economy editor at Calcalist. Michael is also the host of the “Free and Decentralized” podcast and is launching a new podcast called “Web3 Watchdogs.” He is a lawyer and holds a Master’s degree in International Relations and a Bachelor of Law from the University of Haifa.