Crypto Experts Name Ethereum The Queen Of Digital Currency But Let’s Talk About Its Security

March 9, 2023

The last few years have shown that the jurisdiction of digital currencies knows no limit as several sectors welcomed cryptocurrencies and the blockchain into operations.

Investing in digital currencies with a history of beating bear markets and secure networks is crucial for organisations seeking ways to maintain exposure and competitiveness in the market. Ethereum and Bitcoin are the most well-known digital currencies that fit the bill. Those looking for a platform where to buy Ethereum or Bitcoin can use Binance because it provides information about cryptocurrencies’ evolution and helps them figure out when the ideal moment to invest in a coin is. 

Bitcoin and Ethereum have been on the crypto market for more than two cycles, enabling investors to earn high returns on investments in bull markets. People considering investing in cryptocurrency at the moment most likely think about buying one of the two largest digital currencies by market cap. However, considering the high price of Bitcoin, many turn to Ethereum. Ethereum is also a proven bear market beater because it spiked in value in the next bull market. A lot has changed for the most popular altcoin since the last bear market, most notably the Merge that allowed it to switch to a proof-of-stake consensus. This eco-friendly consensus allows the blockchain to save 99.95% more energy. Considering the present global focus on energy efficiency, ETH ensured its longevity and survival in the sector. But this feature isn’t enough to convince investors to add it to their portfolios. 

Is Ethereum secure?

The potential of a cryptocurrency like Ethereum doesn’t count for much if it lacks advanced security features. So, the question is, how secure is the decentralised network that is Ethereum? 

According to experts, Ethereum is more secure than most innovative blockchain solutions. Still, if you use an exchange or decentralised app that lacks proper security, your data and finances can get compromised. 

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Suppose you’re new to the subject; asking if Ethereum is a secure cryptocurrency is similar to asking if laptops and smartphones are secure; you should be more specific if you want a meaningful answer. Ethereum is a blockchain, like all the other cryptocurrencies available on the market. However, its functionality is different from the other digital currencies because it was created to enable the execution of smart contracts. So if you want to find out if Ethereum is secure, you need to find answers to more specific questions like Is the Ethereum blockchain secure? Are smart contracts secure? Can the Ethereum network be hacked?

Unfortunately, people lacking cryptocurrency knowledge will look at a hack resulting from an issue with smart contracts and conclude the entire Ethereum blockchain is unsafe. This is a bad interference because you cannot say that the entire Internet is unsecure only because cybercriminals can use it to send scam emails. 

Why do some believe Ethereum lacks security?

The matters of security have become more complicated since Layer 2 networks have increased in popularity because they add a new dimension to the Ethereum network and bring their own security concerns. Layer 2 ecosystems are different from the Ethereum blockchain because they’re meant to remove some of the computational strain the main blockchain features and boost its scalability. 

To understand if Ethereum is secure, it’s best to focus on its infrastructure as a blockchain and its smart contracts – even if the Layer 2 networks have a huge impact on its security processes. 

Blockchain hacks don’t have much to do with Ethereum’s security

Most of the high-profile hacks and security issues the news reported aren’t the result of a vulnerability in the Ethereum blockchain. They’re connected with the infrastructure of smart contracts because blockchain as technology in itself is one of the most reliable solutions known.

Blockchain (whether we talk about Ethereum or bitcoin) has been created to prevent anyone from seizing control over the ecosystem or adding counterfeit blocks to the ecosystem. Ethereum miners receive economic incentives – minted ether, transactions fees – for mined blocks, which encourages them to act in the blockchain’s best interest instead of trying to manipulate it. 

The proof-of-stake consensus is expected to boost Ethereum’s security

Everyone knows that Ethereum completed the Merge, meaning that it transitioned from a proof-of-work to a proof-of-stake consensus. The previous mining model encouraged miners to solve complex mathematical problems to create new blocks to add to the blockchain. But the new model requires validators to take turns on the ecosystem to propose and validate blocks. They receive incentives according to the number of coins the node is staking. 

Ethereum supporters state that the switch can increase Ethereum’s security. For someone to take control over a proof-of-stake blockchain, they need to control 51% of the computing power. But for someone to control a proof-of-stake blockchain, they need to control over 51% of the total number of coin stakes. Therefore, holding this amount of ETH is more expensive than controlling 51% of computing power. 

Statistics show that a 1-hour attack on Ethereum using the proof-of-work consensus would cost $282,539. Ethereum’s current market cap is over $38 billion, so someone would need around $20 billion to control 51% of ETH. An attack in the present conditions would cost millions. 

Smart contracts’ flexibility could harm Ethereum’s security

When it comes to digital currencies, there’s a trade-off between decentralisation and security because the more decentralised a system is, the higher the risk of a security breach. Smart contracts are such a trade-off example. Solidity – the programming languages of the blockchain were created with flexibility in mind. Ethereum enables developers to design virtually any kind of token or DApp they want. This is one of the reasons why Ethereum hosts some of the most prominent projects in the sector but has also experienced several security breaches over the years. 

The programming language’s flexibility shouldn’t be blamed for the blockchain’s vulnerability, but its semantics because they make it challenging for some programmers to master. It’s hard for some developers to learn programming languages because while they look similar to JavaScript, they behave differently. 

Given the presented info, we can conclude that Ethereum is a secure blockchain, but its users’ choices can make them vulnerable to breaches. 

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