The development of distributed ledger technology (DLT) has progressed from the early concepts of digital currencies to a complex global financial infrastructure as early as 2026. In this process, a core question has always been asked: can the blockchain itself be hacked, or do the vulnerabilities only exist at the application layer? According to analysis from Tan Phat Digital, the majority of financial losses do not originate from defects in the cryptographic algorithm of the protocol layer (Layer 1), but arise from smart contract fragility, operational errors and social engineering attacks.
Statistical data shows that 2025 is a challenging year for Web3 security with the total value of stolen assets exceeding 4 billion USD. In particular, the hack of the Bybit exchange in February 2025 with a loss of up to 1.5 billion USD became the largest cryptocurrency theft in history, demonstrating that even storage systems considered the gold standard can be disabled by nation-state threat actors.
Core Protocol Layer Security: Cryptographic Fortress and Consensus Risk
The protocol layer represents the foundation of the blockchain. Theoretically, "hacking" a large blockchain like Bitcoin requires breaking mathematical principles or taking control of a large portion of the network's resources. To date, leading blockchains have not recorded any successful intrusions into the core source code layer to illegally change the ledger without going through control of the consensus mechanism.
The Economics of 51% Attacks
51% attacks remain a constant threat to Proof-of-Work (PoW) protocols. When an entity controls more than half of the computing power (hashrate), they can rewrite recent transaction history or perform double spends. Here are the details of 1-hour attack costs on popular networks (updated data 2025-2026):
Bitcoin (BTC): Capitalization $1.58 T; SHA-256 algorithm; 1 hour attack cost is $1,538,305; Hashrate rental capacity is 0%.
Litecoin (LTC):Cap $4.46 B; Scrypt algorithm; 1 hour attack cost is $66,239; Hashrate rental capacity is 9%.
Zcash (ZEC):Cap $4.88 B; Equihash algorithm; 1 hour attack cost is $24,363; Hashrate rental capacity is 1%.
Bitcoin Cash (BCH):Cap $9.72 B; SHA-256 algorithm; 1 hour attack cost is $10,498; Hashrate rental capacity is 0%.
Ethereum Classic (ETC):Cap $1.47 B; Etchash Algorithm; 1 hour attack cost is $4,619; Hashrate rental capacity is 0%.
Dash (DASH):Cap $549.19 M; X11 Algorithm; 1 hour attack cost is $400; Hashrate rental capacity is 2%.
Kaspa (KAS):Cap $872.48 M; Algorithm kHeavyHash; 1 hour attack cost is $3,889; The hashrate rental capacity is 7%.
The above data demonstrates that Bitcoin is almost immune to these attacks due to the huge cost, while smaller chains like Dash or Ethereum Classic are high risk.
Modular Architecture and Risk Shift
By 2026, the rise of modular blockchains (like Celestia, EigenLayer) has changed the definition of security. Decoupling the execution, consensus, and data availability layers increases scalability but also creates risk at the communication points between the layers. A bug in a re-staking protocol like EigenLayer could create a domino effect affecting a series of dependent networks.
See more: What is Smart Contract Audit? Why Blockchain projects need security audits
Exploiting the Application Layer: The Real Weakness of the Web3
If the protocol layer is the fortress, then the application layer is often the door that is not well locked. Smart Contracts are immutable, meaning that logic errors will exist forever without an upgrade mechanism.
Mathematical and Logical Vulnerabilities in DeFi
DeFi protocols are often attacked by exploiting logic errors. The most prominent example in 2025 was the hack of the Cetus protocol on the Sui network with a loss of 223 million USD:
Protocols affected: Cetus DEX exchange on the Sui network.
Root cause: Integer Overflow error in the
checked_shlwfunction of the math library.Attack mechanism: Hackers use Flash Loan to manipulate prices, then exploit bit shift errors to deposit 1 token but receive liquidity worth billions of dollars.
Processing results: Freezing 162 million USD thanks to the quick coordination of network validators.
This incident shows that a hacked application does not mean the blockchain is faulty; The Sui network still operates normally according to cryptographic rules.
The Fragility of Bridges and Governance
Bridges continue to be a favorite target due to the large amount of assets locked up. In addition, governance manipulation cases such as the case of Andean Medjedovic stealing 65 million USD from KyberSwap through creating virtual prices for withdrawals at artificial prices are also a warning about complex logic flaws.
Operational Risk and Social Engineering: Lessons From the Bybit Hack
In 2025, hackers have a strong focus on the "human layer". The $1.5 billion Bybit hack in February 2025 is a typical example:
Cold Storage: Completely disabled because transactions are signed directly by the owner.
Multi-sig: Does not work because the signer is fooled by the fake interface (UI Masking).
Third-party custody: Becomes the main attack vector through hijacking Safe{Wallet}'s signing infrastructure.
This incident highlights that security is not just about mathematics but also about the integrity of the human-machine interaction interface.
Step Finance and Treasury Wallet Management Incident
On January 31, 2026, the Step Finance platform on Solana had approximately 30 million USD SOL stolen from treasury wallets. The attacker carried out a systematic process of unstaking and transferring funds, suggesting that the administrator's secret keys were exposed or privileged access was taken.
Cryptocurrency Crime Overview 2025-2026
Based on reports from security organizations, Tan Phat Digital recorded record numbers:
Total value lost in 2025: Exceeded the threshold of 4 billion USD (a sharp increase compared to 2.2 billion USD in 2024).
Proportion due to Lazarus (DPRK): Accounts for 52% of total global damages.
Damages from operational errors: Reaching 2.1 billion USD, confirming that humans are a bigger weakness than code.
Project failure rate: About 80% of Web3 projects cannot recover after major hacks.
See more: Is blockchain safe? Blockchain Security Analysis 2026
Effective Security Practices 2026
To deal with threats, the ecosystem has implemented new security standards:
Transaction Simulation: Allows users to see the final result (where assets go, what permissions are granted) before actually signing.
Hardware-bound Multi-Factor Authentication (Hardware-bound MFA): Eliminate SMS OTP to use YubiKeys or Passkeys, reducing the risk of account takeover by 90%.
Artificial intelligence (AI) in defense: Tools like Darktrace ActiveAI help detect behavioral anomalies in real time instead of relying solely on static rules.
However, AI is also a "double-edged sword" when hackers use Agentic AI to create deepfake videos impersonating leaders to trick employees into transferring money, causing losses of up to tens of millions of dollars in single attacks.
10 Frequently Asked Questions (FAQs) About Blockchain Security in 2026
1. Can Blockchain be hacked?
Theoretically yes, but in practice it is extremely difficult. Attacks on the blockchain "core" typically require control of more than 51% of network resources (hashrate or stake). Most "blockchain hacks" are actually hacking applications (DEX, Bridge) or taking control of wallets through human error.
2. How much does a 51% attack on Bitcoin cost?
As of 2026, the cost to carry out a 51% attack on Bitcoin in 1 hour is more than 1.5 million USD. However, the actual cost is much higher because it is not possible to rent enough mining equipment from outside sources.
3. Why was Bybit hacked for 1.5 billion USD despite having a cold wallet and multi-signature?
In the 2025 hack, Lazarus hackers did not break encryption but attacked the user interface (UI Masking). They tricked executives into signing off on transactions that looked legitimate on the screen but actually sent money to the hacker's address.
4. Are audited smart contracts absolutely safe?
No. The Cetus Protocol hack ($223 million) in 2025 is an example, where a mathematical error in the Move shared library was missed by multiple audits. Auditing only reduces risk but does not completely eliminate complex logic errors.
5. What is "Transaction Simulation" technology?
This is a "sandbox" that allows you to test transactions before signing. It shows the exact amount of money going out of the wallet and the true destination address, helping to detect fraudulent contracts (drainer) or UI masking errors.
6. Is AI helping or harming blockchain security?
Both. AI is used to scan code for vulnerabilities and detect fraud in real time. In contrast, hackers use AI (Agentic AI) to create personalized phishing scenarios and deepfake videos, helping increase revenue from scams by 4.5 times.
7. Why do experts advise giving up SMS OTP and using YubiKey?
SMS OTP is extremely vulnerable to SIM-swap attacks (taking control of the phone number). Hardware-bound MFA like YubiKey requires a physical device to be on-site for authentication, neutralizing 90% of the risk of account takeover.
8. Did the Step Finance hack affect users' funds?
No. The attack on January 31, 2026 only targeted the protocol's treasury and fee wallets. Because Step Finance is a portfolio management platform (not holding assets), users' funds in personal wallets remain safe.
9. Why do 80% of crypto projects collapse after being hacked?
According to Immunefi, the main cause is not the amount of money lost but the collapse of trust and lack of emergency response plans. Many projects are completely paralyzed and cannot convince users to come back after vulnerabilities are exposed.
10. How to protect yourself against Deepfake fraud in Web3?
Always implement the "Zero Trust" principle. If you receive a request to transfer money or provide a private key from a superior/relative via video call, always re-authenticate via a second independent communication channel (for example, a direct phone call or face-to-face meeting).
The question "Is Blockchain hacked?" there is a clear answer in 2026. Blockchain itself is a fortress, but the surrounding ecosystem is full of vulnerabilities. Conclusion from Tan Phat Digital: The safety of digital assets in the future not only depends on encryption algorithms, but also depends on the alertness of users and the discipline in the operations of organizations. In the Web3 world, the line between safety and disaster is just one wrong click away.
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