Cryptocurrency hacks are getting increasingly worrisome by the day.
According to Forbes, “since the network is decentralized and trustless, it doesn’t have a mechanism to discriminate between transactions that are made with stolen coins or legitimate ones.”
Due to the cryptocurrency’s inability to reverse transactions, it has become all the more important to prevent illegal transactions from taking place.
How Cryptocurrencies Are Stolen
There are several ingenious ways that are being used by hackers to pilfer cryptos from the wallets of unsuspecting individuals.
Copy paste exploits: These are malwares installed on a person’s computer without them knowing. The malware programs exchanges the wallet’s address of the individual with the hacker’s own address. This then leads to the hacker collecting all the cryptocurrency of the person into their own wallet.
Credentials Compromising: This involves getting access to the private key of a crypto wallet holder. With this key, the hacker can then transfer funds from the unlucky person’s wallet, irrespective of their location on the map.
Phishing Attacks: This involves tricking an individual by creating a fake site that totally resembles a credible site. For instance, a scammer can create a URL that looks the same as Cointelegraph’s by simply replacing the “i” with “¡.” An individual who is not vigilant can login all their credentials and information to the fake site, which would then be recorded and used later for nefarious activities.
The $5 wrench attack: This is mostly applicable to public personalities. This type of hacking involves the kidnapping of these individuals by a group of persons with the sole intent of getting the keys and credentials to all their exchange accounts and wallets.
How to Protect Your Cryptocurrency
Even though it is almost impossible to eliminate crypto thefts, measures can still be put in place to reduce the theft from actually happening. Some of the safeguards given are as follows:
- Store tokens and cryptocurrency in a paper or hardware wallet that is offline.
- Limit the amount of crypto held by exchanges to that which is needed for exchange and trading only.
- When not in use, store paper or hard wallet in a locked safe.
- Always verify the address of the wallet after pasting it. Also, when sharing a wallet address with another person via the internet, be sure they have the correct address by supplying an image of the address they can cross-check with.
- Access your wallets and exchanges with only credible bookmarks lodged in your browser.
- Hide the balance of your wallets by using multiple passwords on your hardware wallet.
- Avoid sharing the extent of your crypto assets in public forums.
- Don’t store your private keys and wallet in the same place.
From its inception up till this moment, over $1 billion have been lost to hackers in the crypto industry. But there is no reason why this situation should continue. Hopefully, with the implantation if the above practices, individuals can ensure that they do not become part of the statistics.
Familiar with any other tips to safeguard crypto assets? Go ahead and share them in the comments.