Blockchain Technology Security and Attacks 5 — Questions and Answers
Question 1: What is a 'bridge exploit' and why are cross-chain bridges high-value targets?
- Attacking smart contracts that hold large reserves of locked assets to mint unbacked tokens on the destination chain (Correct answer)
- Exploiting latency between blockchains to double-spend assets in transit
- Compromising bridge validators by bribing them to approve fraudulent transfers
- Using bridge protocols to launder stolen funds across multiple blockchains
Correct answer: Attacking smart contracts that hold large reserves of locked assets to mint unbacked tokens on the destination chain
Bridges lock assets on one chain and mint wrapped tokens on another; exploiting the lock contract allows attackers to mint tokens without depositing real assets, as seen in the Ronin and Wormhole hacks.
Question 2: What is 'wash trading' in the context of NFT marketplaces and why is it harmful?
- Buying and selling NFTs to oneself or colluders to artificially inflate perceived trading volume and prices (Correct answer)
- Using bots to flood NFT listings with fake offers that are withdrawn before settlement
- Duplicating NFT metadata across multiple platforms to claim royalties multiple times
- Minting identical NFTs on competing chains to confuse buyers about authenticity
Correct answer: Buying and selling NFTs to oneself or colluders to artificially inflate perceived trading volume and prices
Wash trading creates false price discovery and misleads buyers about an NFT's value, potentially constituting market manipulation and defrauding investors.
Question 3: Which cryptographic weakness made early Bitcoin brain wallets (password-derived keys) vulnerable to theft?
- Low-entropy passwords could be brute-forced offline since the public address alone revealed which hash function to attack (Correct answer)
- SHA-256 collisions allowed attackers to find alternative passwords producing the same private key
- Brain wallets leaked passwords through timing side-channels in the key derivation function
- Bitcoin's elliptic curve allowed recovery of the private key from two signed messages with the same nonce
Correct answer: Low-entropy passwords could be brute-forced offline since the public address alone revealed which hash function to attack
Brain wallets hash a password to derive a private key; weak passwords are trivially brute-forced against all known Bitcoin addresses using GPU clusters.
Question 4: What is 'phishing via fake token approval' and how does it compromise DeFi users?
- Tricking users into signing unlimited token approval transactions that grant malicious contracts full spending authority (Correct answer)
- Sending fake airdrop tokens that execute malicious code when transferred to a DEX
- Creating lookalike token contracts with similar names to steal swap fees
- Impersonating MetaMask pop-ups to capture seed phrases during approval flows
Correct answer: Tricking users into signing unlimited token approval transactions that grant malicious contracts full spending authority
Malicious sites prompt users to approve unlimited token allowances to attacker contracts, which can then drain approved tokens at any time without further user interaction.
Question 5: What security threat does 'weak nonce reuse' in ECDSA signatures pose to blockchain wallets?
- Reusing the same nonce in two signatures allows recovery of the private key using simple algebra (Correct answer)
- Nonce collisions cause transaction replay across different blockchain networks
- Repeated nonces inflate transaction IDs making double-spend detection harder
- Nonce reuse bypasses replay protection in EIP-155 signed transactions
Correct answer: Reusing the same nonce in two signatures allows recovery of the private key using simple algebra
If the same ECDSA nonce k is used twice with different messages, the private key can be algebraically derived from the two public signatures alone.
Question 6: How does a 'vampire attack' work in the DeFi ecosystem?
- A new protocol forks a competitor and offers superior incentives to migrate liquidity providers, draining the original protocol (Correct answer)
- An attacker drains liquidity pools by exploiting price imbalances across multiple AMMs simultaneously
- A smart contract siphons a percentage of all swap fees from liquidity pools without LPs noticing
- A bot continuously removes and re-adds liquidity to harvest yield while avoiding impermanent loss
Correct answer: A new protocol forks a competitor and offers superior incentives to migrate liquidity providers, draining the original protocol
Vampire attacks offer outsized token rewards to poach liquidity providers from established protocols, rapidly shifting TVL and user base to the new entrant.
Question 7: What is 'smart contract honeypot' and how does it trap attackers?
- A contract that appears to have an exploitable vulnerability but contains a hidden mechanism that prevents fund withdrawal (Correct answer)
- A decoy node that records attacker IPs when they attempt to broadcast invalid blocks
- A fake liquidity pool that simulates high returns to lure attackers into depositing funds
- A contract that mimics a vulnerable DAO but triggers a governance lock when exploit code is detected
Correct answer: A contract that appears to have an exploitable vulnerability but contains a hidden mechanism that prevents fund withdrawal
Honeypot contracts appear exploitable (e.g., seemingly exposed funds) but use hidden code to trap attackers' deposited ETH, turning the tables on would-be exploiters.
Blockchain Technology Security and Attacks 5
What is a 'bridge exploit' and why are cross-chain bridges high-value targets?