The blockchain network is, by far, one of the most secure platforms ever established. But this does not save it from vulnerabilities, especially the threat of hacking attacks. Since crypto trading is commonly accessed through gadgets in the cloud, it remains open to various cryptocurrency exchange hacks.
As much as the total eradication of cryptocurrency hacking is ideal, hacks still pervade all activities involving the internet, hardware, and software. Thus, the only solution would be to secure crypto payments and transactions by doing the following steps to be discussed below.
We will provide some of the essential guidelines you must follow to protect your cryptocurrency.
Defining Cryptocurrency Hacking
Blockchain technology can only be more robust if its community knows what to be wary of and also learns from past attacks and vulnerabilities. Before carrying out ways to protect oneself from hacks, one should be aware of what crypto hacking is and how it operates.
Hacking is formally defined as the act or the attempt to gain unauthorized access and exploit a computer or an account. Set in context, cryptocurrency hacking—or some refer to as cryptojacking—is the gain of illicit access to an account to steal or mine tokens such as Ethereum, Bitcoin, Dogecoin, etc.
A Case of Ethereum Hacking
The following example demonstrates how cryptocurrency hacks happen in real life.
As reported by Technology Review, Coinbase became a victim of a hacking attack. Specifically, hackers exploited the platform's ETH transactions by rewriting the transaction history. This shows that even a reputable and popular exchange platform is still susceptible to these weaknesses.
This overhauling of transaction history enabled hackers to reuse some of the cryptocurrencies when making payments. This activity is also known as "double-spending." While Coinbase confirmed that there was no stealing of actual currencies, another platform by the name Gate.io stated that they lost $200,000 to cryptocurrency hacks.
These cases are just two among the series of attempts to hack cryptocurrency.
Improving Cryptocurrency Security
A market free of thieves and hackers is still far away from reality, if not entirely impossible. The most that traders can do is safeguard their coins and wallets by prioritizing account security.
Below are some of the general procedures that you can do to secure your digital assets and protect your funds from hacking threats.
- Hardware or Paper Wallet Alternatives. Storing your funds in physical wallets is considered the safest way to trade. Since these wallets are offline and physically manipulated, your funds are safe from online and almost invisible hackers.
- Implement Two-Factor Authentication. Add extra layers of security to your account. Note that having 2FA does not absolutely protect your account since hackers may also gain access to your phone. This is just an extra precautionary method to make your account more secure.
- Do Not Click on Malicious Links. Most root causes of hacks are from commonplace carelessness. Lucrative offers may attract users to click on links that actually contain malware and other phishing devices that may mine data from your computer and eventually expose your account details.
- Install Anti-Virus Extensions and Software. Anti-virus programs may help in detecting malware quickly.
Major Hacking Attacks and What to Learn From Them
There are more intricacies involved in stealing physical money from banks than looting digital assets on the web. Thus, hackers prefer to hack cryptocurrency because it is more efficient and safely done. Here are some of the most common attacks that hackers carry out and real-life examples of each.
Phishing and Malware Attacks
These hacks are hailed as the conventional cryptocurrency attack executed by most hackers. But they do not merely unravel and steal all your money. Hackers take time to do social engineering in generating a list of users in a platform, studying each user's interests, and luring them to attractive offers.
These offers are contained in purposefully crafted emails that hackers send to targeted users. Once they open this, their cryptocurrency and security are compromised. The hackers then work their way on how the platforms work and where crypto wallets are stored. If the exchange is programmed to send crypto, then hackers illegally gain operator permissions to wire funds to their accounts.
An example was the last Binance Exchange security breach in 2019. Hackers focused attacks on how to hack BTC hot wallets. In doing so, hackers were able to garner a large number of users' private key combinations.
Fake Web Wallets
Fake web wallets are used as another kind of phishing attack. Some websites promote themselves as a wallet that traders can use. Once the audience sends money, the website will soon be gone, and so will your coins. Even fake applications have made their way into Google Play.
As spotted by Reddit users, a fake wallet infringed the name of Trezor and established itself as a "Trezor Mobile Wallet." Upon investigation, it was found that it did not necessarily harm existing Trezor users.
But gullible newcomers are susceptible to using it. Once depositing their funds, their coins are wired to a fake wallet named "Coin Wallet." Common exchanges involved are BTC, ETH, and other popular coins.
Stealing Secret Keys
Secret keys give users permission to interact with their cryptocurrency - whether to spend, sell, or exchange them. These keys are embedded in the crypto wallets. Blockchain then stores the user's balance.
This means that the wallet contains the key or the passphrase of the user. Vulnerabilities may occur when these keys are accidentally disclosed to non-authorised persons.
In 2019, a Reddit user accused the Coinomi crypto wallet of this kind of breach. The user claims that the wallet mistakenly exposed his passphrase, leading to an unfortunate $70,000 loss.
While developers assert that it was not the wallet's fault, the user is persistent that the theft resulted from their bug.
Cryptocurrency and Security: Guard Crypto Against Hackers
From the reports stated above, here are some of the takeaways that you must bear in mind if you want to defend your crypto from hackers.
Check the wallet you are using. You do not want to have holes in your wallet - this could cause you to lose your money. The same applies when selecting e-wallets to store your digital assets. Ensure that the wallet you will be using is legitimate. You can refer to our list of credible wallets and user feedbacks in their platform. Also, check the domain.
Do not disclose relevant information. Phishing attacks mainly rely on obtaining private information from your interests to your private keys. Do not be too careless when releasing information about yourself, especially the addresses and keys linked to your accounts and wallets.
Integrate an ad-blocking extension. Search for resources that offer ad-blocking and anti-crypto mining services that you can incorporate into your browsers. This is to ensure that no malware caused by advertisements can infect your computer and compromise your security.
These are the fundamental points that you must watch out for if you want to uphold the safety of your cryptocurrency against hackers. Start your cryptocurrency trading journey with us at Jidex for safer and secure transactions.