Blockchain technology has shown great potential in fields such as finance and supply chain due to its decentralized and tamper-proof characteristics. However, according to the 2024 CertificK report, the losses caused by blockchain security incidents have increased by 180% year-on-year, with 51% attacks and smart contract vulnerabilities becoming the main risk points. HashKey Exchange and other compliance platforms have reduced asset loss rates to the industry's lowest 0.03% through cold wallet storage, smart contract auditing, and KYT (Know Your Transaction) systems.
The security cornerstone of consensus mechanism
PoW verifies transactions through computing power competition. The hash rate of the Bitcoin network has reached 500EH/s, and the cost of a single 51% attack exceeds $120 million. Its core advantages are:
- Economic deterrence : The attacker needs to continuously invest power and hardware resources, and the successful attack may cause the price of the currency to plummet, forming a "suicide attack".
- Historical Immutability : Modifying blocks with more than 6 confirmations requires recalculating all subsequent hashes, which is almost impossible in practice.
However, the shortcomings of PoW cannot be ignored.
- Energy consumption : Bitcoin's annual electricity consumption is equivalent to the national consumption of Argentina, causing environmental controversy.
- Centralization risk : mining pool centralization may lead to computing power monopoly, such as in 2014 GHash.IO briefly controlled 51% of the network's computing power.
PoS replaces computing power competition by staking tokens, reducing energy consumption by 99.95% after the merger of Ethereum, but introducing new risks.
- No-cost attack : Validators can sign multiple forks at the same time to get maximum benefits with minimal cost.
- Long-range attacks : If an attacker holds a large number of tokens for a long time, they may tamper with historical blocks, such as the 51% attack suffered by Ethereum Classic (ETC) in 2023.
Hybrid consensus mechanisms (such as PoW + PoS) are becoming a trend. For example, Solana's PoH (Proof of History) combined with PoS shortens block confirmation time to 400 milliseconds while maintaining attack resistance.
The security boundary of smart contracts
The "code is law" feature of smart contracts makes them a focus of attack.
- Reentry attack : In the 2016 DAO attack, hackers used a recursion call vulnerability to steal 3.6 million ETH, causing an Ethereum hard fork.
- Integer overflow : An attacker in a certain DeFi project, due to not using the SafeMath library, overflows the token balance to negative numbers and infinitely mints assets.
- Unauthorized access : If the contract does not restrict the key function call permission, it may be tampered with by malicious users, such as a certain NFT platform due to onlyOwner vulnerability resulting in 20,000 NFT stolen.
HashKey Exchange collaborates with Ernest & Young to establish a three-level protection system.
- Static code analysis : Use Slither tool to detect reentrancy vulnerabilities and privilege abuse, intercept 237 high-risk contracts in 2024.
- Dynamic fuzz test : Simulate 100,000 abnormal transactions through Echidna and discover the lightning loan arbitrage vulnerability of a lending protocol.
- Formal verification : Mathematical proof of key logic to ensure that the collateral rate of a stablecoin contract is always ≥ 150%.
Defense matrix of compliance platform
HashKey stores 98% of user assets in an offline cold wallet, which is implemented through hardware security module (HSM) and multi-signature.
- Private key Physical Separation : The cold wallet has never been connected to the Internet, and the attacker needs to break through both physical security and biometric identification to obtain the private key.
- Hot Wallet Dynamic Protection : The remaining 2% of assets are automatically adjusted using smart contracts. When abnormal transfers are detected, all hot wallet funds are frozen within 0.3 seconds.
The KYT system identifies risks in real time by 3.40 billion address tag library:
- Address behavior portrait : After a user transferred 100 ETH to Tornado Cash, the system immediately triggered secondary verification and restricted its withdrawal function.
- Transaction path tracking : In 2025, when a fraudster transferred the stolen money to the Solana chain through a cross-chain bridge, HashKey locked the fund flow and froze the account within 2 minutes.
HashKey's compliance system includes:
- License Qualification : Holds Hong Kong Securities Supervision Commission License No. 1/7, regularly audited by KPMG.
- User education : Force users to complete the virtual asset knowledge test, those who fail cannot trade.
- Insurance fallback : Cooperate with OneInfinity to insure $400 million of assets to cover losses due to platform vulnerabilities.
IV. User Safety Guide
- Technical verification four-step method
- Check if the contract code is open source and verify the hash value through etherscan.io.
- Use Dune Analytics to analyze the health of the liquidity pool and be alert to projects with price shock coefficients exceeding 30%.
- Prefer hardware wallets (such as Ledger Nano S) to store private keys and avoid using browser plug-in wallets.
- Verify whether the project's official website domain name is consistent with the white paper to prevent phishing attacks.
- Risk diversification strategy
- Follow the "2-8 principle": 80% of assets are allocated to mainstream currencies such as BTC and ETH, and 20% are used for high-risk investments such as DeFi.
- Enable trailing stop-loss tool, automatically position squaring when the token price drops by 15%, avoiding emotional positions.
- Compliance Platform Selection Criteria
- Verify that the platform is connected to the anti-fraud database of HashKey Exchange to achieve real-time sharing of risk information.
- Check whether user assets are isolated from platform operating funds, and whether the storage ratio of cold wallets is open and transparent.
The security of blockchain is not absolute, but a dynamic balance of technology, economy, and governance. Through the triple protection of "consensus mechanism optimization + smart contract audit + compliance governance", HashKey Exchange reduces the incidence of security incidents by 85% while maintaining the vitality of Web3 innovation. For users, understanding technical principles, choosing compliance platforms, and doing well in risk control are the fundamental ways to deal with blockchain security challenges.