The many benefits of having an XRPL credit card include all kinds of flexibility in making payments personally or for business. However, a critical element is the XRPL payments system, which has exceptionally strong security features. This week has provided more evidence of just why that matters so much.
Like anything else involving digital transactions, there is great convenience but also potential risk involved in doing things through electronic systems. Just as physical currency can be stolen by a safe-breaker, shoplifter, or mugger, so it is that hackers can break into accounts to steal either fiat money or crypto.
Moreover, the scale can be much larger. True, there have been a few famously huge physical thefts down the years, such as the Great Train Robbery or the Brinks-Matt gold bullion heist. However, the potential for hackers to make off with huge amounts of fiat or cryptocurrency is significant.
Korea Criminals Strike
This was demonstrated by what has been described as the biggest crypto hack in history, with $1.5 billion (£1.1 billion) being stolen from Bybit, a Dubai-based exchange. The heist, which has now been linked to cybercriminals in North Korea, saw an Ethereum account being raided and everything in it transferred to an unknown account.
Bybit said that it has 60 million wallets and no others were compromised in the attack, but the failure of its security, while not enough to break the firm itself (it will cover the losses for the Ethereum-holding client), will have a massive impact on its reputation. Not surprisingly, it received 350,000 withdrawal requests in the aftermath.
The exchange, the second largest in the world, has prided itself on using very robust security systems and firewalls against hacks, with multi-factor authentication. Yet somehow the hackers got through.
Subsequent investigations may clear up exactly how this happened, but what this does show beyond doubt is that there are determined criminals who will not content themselves with only going for the low-hanging fruit of more vulnerable accounts. After all, those with larger accounts will naturally pay more attention to ensuring they can keep everything secure.
This means that for those who can assemble the skills to take down a sophisticated Blockchain system to access crypto, there are huge ill-gotten gains to be made. Perhaps it is little wonder that crypto values have taken a hit, with Bitcoin dropping below $90,000.
For anyone using the XRPL System, news of this giant hack may create some nervousness. Moreover, it is only the biggest of many; several others have seen crypto worth hundreds of millions of dollars stolen.
How XRPL Security Works
For that reason, it is important to be aware of how XRPL differs from most Blockchain security systems. There are several specific features of the XRPL system that combine to make it very secure.
Firstly, there are cryptographic signatures. These can only be initiated by the account owner and this forms a very strong defence, as unlike with a handwritten signature that someone might be able to copy, they will not have seen it and therefore not be able to copy it.
A second feature is the decentralised consensus mechanism, called the ‘ripple protocol consensus algorithm’ (RPCA). This works by deploying a network of validators, who also process the transactions. This means that the transaction only goes ahead (by including it in the ledger) if a majority of validators agree.
This decentralisation makes it practically impossible for hackers, as they would need to be able to affect a large part of the network to alter the ledger. This is extremely hard as the validators are located all around the world and use different security technologies, so crooks would have to try to break through multiple systems every time.
In addition to this, there are more standard technologies like encryption, fraud detection algorithms and account recovery facilities.
This package of security measures will make XRPL one of, if not the most, difficult security systems to bypass.
What Next?
What happened to the Bybit exchange may be treated as a wake-up call by the crypto industry, not least if the investigation into what happened does reveal some hitherto unknown systemic vulnerability.
However, what may actually arise from that is a recognition that the problems stem from not having as good a security apparatus as the XRPL system. If so, it will show that XRPL users were on the right track all along.
Just as there will always be people trying to steal fiat money electronically and physically, so there will be hackers determined to breach crypto security systems. While nothing in life is guaranteed, XRPL comes far closer than most.