How to ensure the security of cryptocurrency?

Reposted original title: “How Can We Ensure Cryptocurrency Security? Blockchain Technology Alone Is Far from Enough”

The era of masked robbers breaking into banks at night is a thing of the past. Today’s thieves don’t need to worry about disabling bank vault cameras or devising elaborate escape routes, because the heists now happen instantly on the blockchain, not in locked safes. For hackers, all it takes is a clever line of code and an exploitable vulnerability—victims often learn of losses only after the fact.

Rapid technological progress has fueled increasingly sophisticated cybercrime. Attackers constantly evolve their methods, often outpacing the most advanced security solutions. Attackers are quick to adapt, continuously seeking new vulnerabilities and bypassing traditional defenses. This paradox raises the question: if blockchain’s underlying technology is so secure, why do cryptocurrency exchanges still suffer frequent breaches? In 2022 alone, hackers stole over $3.8 billion in crypto. This isn’t because they cracked cryptographic algorithms; rather, they exploited failures in technology and human oversight. Security challenges are only growing, with a web of factors—technical limitations, human error, regulatory inconsistencies, and the methods of storing, transacting, and stealing digital assets—making the threat landscape ever more complex.

True security isn’t just about technology. It requires a holistic approach that proactively addresses a wide spectrum of evolving risks, from smart contract vulnerabilities and social engineering attacks to adapting to a shifting regulatory environment.

The Security Paradox Beyond Blockchain Technology

Although quantum computing isn’t yet practical, most people trust that blockchain’s strong encryption provides solid security fundamentals. But this security is largely confined to blockchain addresses and consensus mechanisms. The vast majority of crypto thefts actually happen at the interface between blockchain and traditional finance: think exchange wallet breaches (hot wallets or cold wallets), smart contract exploits, or social engineering schemes. To stay liquid, centralized exchanges have to keep certain wallets online—making them attractive targets for hackers.

While decentralized finance (DeFi) protocols remove custodial risk and offer another option for users, they inevitably introduce new vulnerabilities. Even seasoned developers can make mistakes when writing complex smart contracts.

Why Centralized Exchanges and DeFi Haven’t Fully Solved Security Problems

Centralized exchanges (CEX) and decentralized platforms rely on sharply contrasting security philosophies and trade-offs. Exchanges like Bybit deploy robust controls: multi-signature wallets, cold storage for 95% or more of assets, and regular professional penetration testing. But centralized systems still suffer from single points of failure and insider threats—risks that no technical measure can fully erase.

Decentralized platforms give users full control of their assets to eliminate custodial risk, but this raises new challenges. DeFi code is transparent and open for community audit, yet blockchain’s immutability means a vulnerability, once exploited, cannot be patched. The complexity of smart contracts creates a significant gap between technical barriers and practical user accessibility. Addressing security challenges requires more than a binary choice between centralization and decentralization. Bybit is pioneering hybrid solutions that combine DeFi self-custody with enterprise-grade security layers—leveraging AI-powered trading surveillance to analyze over 5,000 risk factors in real time. This integration of technologies is essential, but technology alone isn’t enough. As AI-driven attacks grow more sophisticated, with hackers using machine learning to mimic legitimate transaction patterns, ongoing security training for developers and users becomes crucial.

Despite the ever-evolving threat landscape, Bybit is committed to delivering best-in-class user protection. Beyond AI, we’re focused on building intelligent, adaptive security and risk management capabilities. Our systems not only learn from experience but also monitor the broader crypto ecosystem. They proactively identify fresh attack vectors to ensure our defenses stay ahead of emerging threats. This dedication is hardwired into our infrastructure. After each event, Bybit immediately launches comprehensive forensic reviews, extracts lessons learned, strengthens affected (and potentially vulnerable) systems, and maintains transparent communications with the community. These efforts let us not just counter threats effectively, but also continuously strengthen our defenses, keeping us ahead in the battle against cybercrime.

Balancing Regulation and Asset Innovation

Effective regulation is potentially the most powerful lever for improving crypto security—if implemented properly. Measures like mandatory proof of reserves, standardized smart contract audits, and international anti-money laundering collaboration can all reduce systemic risks without stifling innovation. In contrast, sweeping rules—like classifying all crypto assets as securities or restricting privacy-focused technologies—often do more harm than good.

Risk-based regulation calls for focusing oversight on real, concrete threats, not blanket prohibitions. Clear industry guidelines help solve security challenges while preserving blockchain’s innovative potential. This balance is essential for building public trust in institutions and driving mainstream crypto adoption.

Ultimately, securing the crypto space is far more than a technical puzzle—it’s an ongoing promise. The real question isn’t whether cryptocurrencies can be secured, but whether the industry is willing to make the hard investments and tough calls to bring security to life. For Bybit, this means adopting Zero Trust architecture, maintaining transparent security practices, and fostering threat intelligence sharing across the industry. Continuous upgrades and rapid incident response demonstrate our proactive commitment to protecting users and the wider crypto ecosystem. In an industry evolving at breakneck speed, security can’t be an afterthought. It must serve as the foundation for all other aspects of the industry.

Disclaimer:

1. This article is reposted from TechFlow with the original title “How Can We Ensure Cryptocurrency Security? Blockchain Technology Alone Is Far from Enough.” Copyright is held by the original author TechFlow. If you have concerns about this repost, please contact the Gate Learn Team, and our team will process your request according to the appropriate procedures.
2. Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute investment advice.
3. Other language versions were translated by the Gate Learn team. Unless Gate is specifically mentioned, do not copy, distribute, or reuse the translated content.