Crypto hacks and the how to protect your money

As the adoption of cryptocurrencies is gaining ground, the question of safety has come to the fore. Cryptocurrencies are a hot topic globally but unfortunately it has been marred by controversies over the past two years. The publicity around cryptocurrencies over this period has mostly been negative which is unfortunate considering the significant benefits of these digital assets. People are much more aware about the concept of blockchain system and how to keep their crypto key safe. It is still relevant to discuss more about the ways in which cryptocurrencies are stolen and the best methods to defend them from hacking attacks. This would keep the investors abreast of the happenings in the world of crypto and make them better equipped to deal with cyberattacks.

 So, here are some of the ways hackers try to steal your crypto assets.

• Phishing scams: It is the oldest trick in the book and the most common method used by hackers to devoid the crypto users of their digital assets. Investors are enticed to click on a fake website link that appears to be legitimate and once the investor clicks on it, the account details of the investor are harvested allowing them to withdraw funds from the investor's account. Hollywood actor Seth Green learned it the hard way when four of his NFTs including a Bored Ape Yacht Club, two Mutant Apes and a Doodle were stolen by hackers. The theft of the Bored Ape NFT hit him particularly hard as with its loss, he was not able to use it for commercial purposes because only NFT owners can use it commercially. He eventually recovered it by paying $300,000! By now readers must have realized the consequences of a phishing attack. If only he had invested in a cold storage crypto wallet!
• Bridge attacks: In March 2022, hackers pulled off one of the biggest heists in the history of crypto world so far when they managed to steal Ethereum and Stablecoin worth $625 million from the Ronin Network, a side chain used to support a blockchain-based game called Axie Infinity. For those unaware, a side chain is a part of a larger blockchain. A crypto bridge is a network protocol, that establishes a connection between computer network endpoints. It is meant to transfer digital tokens between blockchains smoothly. However this cross-chain communication has become a cause of concern for crypto exchanges as these bridges are prone to hacking. The link connecting two blockchains can be hacked especially by those skilled in blockchain coding. Since each bridge contains a lot of tokens, the hackers who decrypt the bridge can potentially steal billions of dollars.
• Wallet attacks: You can monitor your crypto assets using wallets. These are either hot or cold wallets. Hot wallets are mobile or web applications that store your private key needed to access your digital assets and undergo transactions. The data is stored in servers and that's why they are quite vulnerable to cyberattacks. The hackers can get access to the mobile or computer with a malware and know the account details of the investor including the latter's private key. This can be obtained after the hackers obtain the log of your keystrokes while entering the alphanumeric private key to go through a transaction. They can easily transfer the crypto assets into another account as the key is what one needs to complete the transaction. The investors can see their wealth purged by such hacking attempts. 
• Brute force attacks: Despite the seriousness of the name, it is a simple more of cyberattack where the hacker merely guesses the password of the account. Most passwords have at least 8 characters. This means there are millions of possibilities and to get around this problem, hackers use software that can generate multiple passwords within seconds. These passwords are provided in a trial and error method to barge into the account and once the key is cracked, the account holder has to part away from his assets. In September 2022, Winterminute lost $162 million in one such brute force attack. It is better for investors to choose a more complicated password with more alphanumeric characters to keep a brute force attack at bay.

How cold wallets protect your crypto key

Compared to the above-mentioned wallet, a cold wallet is much safer as the crypto key does not come online. To complete a transaction, the device has to be connected to the computer first. After the device is connected, a crypto bridge transfers an unsigned transaction form to the wallet. The user has to sign within the device using the private key and the crypto bridge then uploads it back to the blockchain network. The transaction is then verified and carried out successfully. During the entire process, a crypto key doesn't come in contact with the online network and this is why hackers don't get to access the keys.

Nut Graf

Recent events in the world of crypto has made people realize the importance of keeping their assets safe. Of all the currently available options, a cold storage crypto wallet is the most suitable one to store your private key. The key never leaves the wallet and the transaction is signed within the device so it never goes online and the hackers have no chance of getting the key.