A bug exploit is an attack that take advantage of a system's vulnerabilities.
Bug exploits refer to attacks in the form of programs, blocks of data or sets of commands that take advantage of system vulnerabilities in order to gain profit or to expose any particular system. Bug exploits may be done by malicious actors to cause unanticipated behavior on applications or computer networks, enabling them to gain access to such systems or run denial-of-service (DDoS) attacks.
According to some publications, there are still many hidden bugs in blockchain and cryptocurrency platforms, which hackers are trying to uncover. There was a recently published report about a Bitcoin bug discovered years ago named the “INVDoS” bug, which, if exploited, would crash Bitcoin nodes. It was discovered by Braydon Fuller back in 2018, who made the information public. It turns out that a hacker could have easily created a malformed Bitcoin transaction that would uncontrollably consume the network’s memory resources.
In the same year, hackers also attacked a cryptocurrency project called Pigeoncoin. They were able to capitalize on Bitcoin’s inflation bug in order to print around $15,000 worth of Pigeoncoins. In doing so, they also had to exploit a bad Bitcoin code. After the discovery of the hack, researchers also saw that there could be more bugs in the Bitcoin network back then that could allow attackers to inflate the supply of Bitcoin above its designated 21 million coin limit.
Bugs like these can be exploited to cause a massive loss of funds through widespread disruption of services and time-sensitive contracts that are implemented throughout affected cryptocurrency markets and exchanges. Therefore, it is important for developers to always subject their projects to extensive security audits and rigid testnet procedures first before they are rolled out to their mainnet for public use.