It is unfortunate that blockchains which were once perceived as unhackable, are now getting hacked. Cyber insecurity is now at an all-time high and its main target is the blockchain. Scenarios such as the 51% attack (where a hacker can gain more than half of a Cryptocurrency network computing power to make double-spends) which was once a theory has already been used to steal thousands worth of cryptocurrency from exchange programs like Coinbase. So, what does that mean for the crypto-community? Despite these attacks, cryptocurrency is now more popular than ever. This is why we have taken the initiative of spreading awareness on blockchain hacking, cyber security, and measures one can take to secure their cryptocurrency.
This occurs when hackers exploit the design, implementation, and network of blockchains. As you may already know, blockchains distributed records of transactions. And hackers have been able to find cyber security loopholes within these networks. That’s why since the inception of cryptocurrency, hackers have been able to loot $2 billion worth of cryptocurrency.
To understand how blockchain hacking can occur, it is imperative that you are familiar with some terms. In a blockchain, there is a protocol referred to as nodes. These are a set of rules that determines how the computers in a blockchain should work. The nodes work to enhancing the security of the chain and this feature is what makes crypto technology so impressive.
The complexity of blockchains is both a blessing and a curse in disguise. Yes, it does make the chain more secure but being so complicated, there is a high risk of making errors when setting it up. For example, Zcash recently admitted to making a cryptographic error where hackers could have made unlimited fake Zcash. The good news is no one discovered that loophole and it fixed.
Cyber Security Blockchain
We are all aware of the harmful effects of a cyber-attack on any business or company. It’s not just funds that are at risk but sensitive data could also fall in the wrong hands. Ever since the beginning of the internet, consumers have had to deal with cyber insecurity. More about data security.
Fortunately, when cyber security blockchain technology was introduced, industries can now benefit from improved cyber security. Thanks to decentralized blockchain technology, data breaches occurring due to cyber-attacks can be prevented. It can offer decentralized medium storage and secure both DNS (domain name system), ensuring safe browsing and online shopping.
Blockchain Security Issues
There are several ways on how blockchain hacking can occur. It could be due to some weakness in the chain, or errors committed by the crypto owner. Let’s look at the top 4 blockchain security issues.
51% Attack – We already talked about this scenario where a hacker can gain more power over the blockchain system and carry out double spends. The latter refers to erasing transactions once goods are received and using the tokens for the second time.
Phishing – This has always been a threat to cyber security. It involves persuading innocent victims to cli8ck on a malicious link so that hackers can obtain their personal data. Phishing is mostly done via email and it often comes under the disguise of a trusted third-party site.
Routing Attack – Because cryptocurrencies use online traffic, they must pass through internet service providers. Hackers perform a routing attack by intercepting data when it is being sent to the ISP. Even though blockchains are decentralized and are unlikely to be intercepted through routing, nodes can be infiltrated and this puts you at some risk.
Typosquatting – One of the oldest tricks in the books of hackers. This involves the creation of fake websites with the aim of obtaining user data. In the blockchain community, hackers create fake crypto exchange websites to gain access to your password and username.
How to Avoid Blockchain Hacking?
Now that you understand what blockchain hacking is and the security issues that revolve around it as well as its impact on cyber security, here are ways on how you can keep your cryptocurrency safe.
Break up your cryptocurrency – For those who have thousands worth of cryptos, the best option is not to put all your eggs in one basket. Several cryptocurrencies and platforms have been under attack for the past two years. And you never know where hackers might hit next. Have several wallets.
Use a particular computer for cryptocurrency – Never sign in to your crypto wallet with your work computer or even a friend’s PC. It is advisable to set aside a specific computer for crypto assets. This will ensure total safety of your coins.
Put your trust in stronger passwords and data encryption – If your flash drive, phone, or laptop stolen, how easy will it be for the thieves to gain access to your wallets? You should always encrypt all your devices and use strong passwords that people can’t guess easily. Forget about using your birthday or surname as your crypto wallet passwords.
Be a smart internet user – When talking about blockchain security issues, we highlighted how phishing and typosquatting can result in blockchain hacks. Be keen when exchanging cryptos, updating software, or even opening mail. This will ensure you aren’t a victim of cyber-attacks.
Enhancing cyber security measures is key when it comes to preventing blockchain hacking. All digital networks, blockchain included are susceptible to vulnerabilities. For you to keep your crypto assets safe, you must have a defensive mindset always. This includes educating yourself about newer techniques hackers are using to infiltrate blockchains and finding solutions on how to avoid this.