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Whether you're a beginner or an expert, Biswap Blog is the perfect place to learn about blockchain, cryptocurrency, security, and technology. Get started today and …
Last updated
Whether you're a beginner or an expert, Biswap Blog is the perfect place to learn about blockchain, cryptocurrency, security, and technology. Get started today and …
Last updated
The decentralized finance sector is gaining popularity quickly, attracting more and more users daily! A huge number of cryptocurrency projects and protocols are being developed in the blockchain ecosystem for profit. Despite the DeFi participants’ well-established coexistence, it is far from harmony! As in real life, there are good and bad guys in the game. Therefore you have consider opportunities and crypto hacks risks entering the DeFi.
Unfortunately, cryptocurrency hacking statistics are growing in parallel with DeFi markets. According to the approximately $4.17 billion in crypto was stolen between 2022 and 2023. We have to admit that crypto security is an issue worthy of discussion and attention.
This article explains the importance of protecting yourself from cryptocurrency hacks and will provide the necessary steps to prevent asset losses from fraud.
📍Take into consideration that these methods are basic and aren’t 100 percent effective. We encourage you to do additional resources to secure your funds from crypto hacking.
One of the most famous benefits of blockchain is security. At the same time, it doesn’t guarantee 100% safety for your assets because many factors are the direct responsibility of users.
Awareness of security tips might save your funds and ensure a quality user experience. In contrast, carelessness can lead to significant losses, privacy violations, and disappointment in crypto.
Crypto stolen by hackers is almost impossible to return and trace the scammer as well. Therefore, preventing a crypto hack is better than solving its consequences.
Crypto scammers create very tricky traps. There are many types and directions of fraud schemes with special characteristics, but the main goals are crypto theft and revealing precious information. Here is a short description of the most popular cryptocurrency hacks and scams.
51% attacks
If a crypto hacker or group obtains more than 50% of the total hash rate, this can lead to a 51% attack, which can have catastrophic consequences. Such hackers can manipulate the order of transactions and prevent their confirmation, and they can even reverse previously verified transactions, causing double-spending.
Phishing attacks
A cryptocurrency wallet hacked by a phishing attack is not a new case. Crypto hackers send mass emails or messages, usually with a link leading to a fake website. The user is asked to enter their login and password. Once users reveal their credentials, the fraudsters may easily succeed in a cryptocurrency wallet hack.
Routing attack
A routing attack is a hack of an ISP (Internet Service Provider). Blockchain hackers divide a network, creating parallel blockchains. This way, the attacker blocks the communication between nodes in the network and the ones that are outside of it. When the attack is completed, all blocks are mined within the alternative chain, the transactions and earnings of the miners are discarded, and scammers get all the hacking crypto.
Scam verification SMS
Users may get a fake notification from hackers that their account is compromised and required to share secure information like their password or 2-authentication SMS verification code via text to avoid a hacking account. Once the user reveals its confidential information, the hacker can access the account.
Scam projects and cryptocurrency
Scammers create entire projects to attract users and steal their cryptocurrency. They might use malicious smart contracts, create an illusion of profit and fake the websites. Usually, such scam projects are characterized by unrealistic promises and weak documentation. But some scammers masterfully imitate trustless platforms.
Hacked platforms
Even honest projects can’t guarantee full safety for you. Hackers made significant efforts to attack crypto platforms to access users’ personal data and funds. Crypto exchange hacks are a wide phenomenon, especially in the CEX industry, as users’ funds are stored in custodial wallets and are accessible to hackers in case of platform breaks.
As you can see, cryptocurrency hackers use diverse methods to steal funds and information. Note that we didn’t describe all possible frauds. Hackers create tricky traps to attack entire networks, protocols, and wallets. Some aspects depend on technology specifics and the project’s security measures. But what can I do to decrease cryptocurrency hacking risk?
Let’s look at the practical steps cryptocurrency owners can take to safeguard their investments. We have divided the security advice into 3 main blocks: wallet security, cybersecurity basics, and investment literacy.
Wallets are used to store assets and a primary thing to secure. First, it’s better to use only reliable crypto wallets with strong reputations. Once you download a wallet, you will create a password and back up a seed phrase. Such simple steps are the first line of defense against a cryptocurrency hack. Don’t neglect and do your best to create a reliable key!
The longer and more complex a password is, the harder it will be to hack your account. Combine uppercase and lowercase letters, symbols, and numbers. Do not include any personal information, such as dates, pet names, or other information relevant to you that is easy to guess or find. It’s better to avoid common combinations of words like “wallet” or “123.” Create your password completely unique, and never reuse it! Make it a rule to change your password from time to time. Also, a 2-factor authentication is always a good idea, as it is an extra layer of security the hacker has to go through, and it’s often enough to prevent completing the attack. These tips also may consider any other case where the password is used.
On the stage of wallet setting, the seed phrase will be generated. You should write it down and keep it safe from prying eyes. Never, under no circumstances, share these word combinations. Let’s summarise wallet security in the core steps.
It would be great to use different wallets for different purposes. For example, a software wallet is suitable for investments and interactions with protocols. But it’s better to use a hardware wallet for storing a significant amount of crypto.
