Are you questioning the security of your digital assets in the world of cryptocurrency? If you are searching to know how secure the cryptocurrency and can it be hacked? Are you interested in knowing how cryptocurrencies can hack? You can surely search for ways to secure yourself in the crypto world so we have come up with a complete guide for you to secure yourself in the world of cryptocurrency and you will find here how cryptocurrency can be hacked.
Cryptocurrency offers several positive opportunities but because It is new in the digital world and has much more money because there are many investors in this world, in this way, it’s a great opportunity for hackers and they get attracted to it. The history of cryptocurrency is puzzling with the high-profile hacks and results in millions and billions of losses. Unfortunately, many businesses, investors, and startups have lost their crypto because of hackers. So how can the cryptocurrency be attacked by hackers and what people can do to protect their digital assets? Let’s dive into a detailed explanation of crypto hacks they will help you to defend your crypto which you have earned hardly.
How Does Blockchain Security Work?
Blockchain technology has built up many security features which make it difficult for hackers to hack. But hackers can also take over a blockchain they can do this by stealing tokens from the sources like wallets or cryptocurrency exchanges. Is it difficult to attack a blockchain? Yes, it is difficult for hackers to attack blockchain because when blockchain runs it means that they don’t have a single point of failure. And cryptocurrencies also use advanced encryption technologies, consensus mechanisms, and public ledgers to increase safety and security.
All the transactions on the blockchain like Bitcoin are publically viewable. Everyone who wants to run a node on the Bitcoin blockchain needs to download the entire transaction history of Bitcoin. Here the high degree of transparency helps to prevent malicious actions from sending invalid transactions.
Consensus mechanisms like the proof of work and proof of stake help the blockchain participants validate transactions without depending on a third party. Proof of work requires that computers solve challenging algorithmic puzzles to confirm the new transactions on the blockchain. But in the case of Power of stake validators must lock the crypto on the blockchain to confirm the new transaction.
The people who mine and stake on the blockchain are incentivized to play by the rules and regulations. Validators and minors will only get awards if they perform their duties well. Many POS chains will slash validators’ crypto if there is any invalid transaction on detection. If someone wants to corrupt a POW chain they will need to have strong computing power to take over half of the network.
When it comes to PoS a hacker would need to stake or hack more than half of the total staking pool. Hacking a blockchain is possible but it is most unlikely on larger networks like Bitcoin and Ethereum as there are millions of investors for both of these cryptocurrencies. If the hacker is going to hack or corrupt the blockchain they have to focus on small altcoin contracts as it will be easy for them to hack small networks as compared to the larger networks.
How Can Blockchain be Attacked?
An attacker or a group of attackers can get access to a blockchain by controlling the majority of the blockchain’s computational power. If they get access to more than 50% of the hash rate they can easily introduce a new blockchain and this I called a 51% attack. It allows them to make changes to transactions that are not confirmed by the blockchain before they took access to the blockchain.
Transactions are then considered to be successful when six confirmation has been completed. For example, if you have transferred 1 bitcoin to your partner then the transaction will be recorded and confirmed in one block this is the first confirmation. That block data is recorded into the next block, then confirmed and the block is closed this is called a second transaction. This has to happen four more times for the network to process the transaction. Transactions that have not been processed after the first and second confirmations can be reversed to a 51% attack.
The attackers then will be able to use the tokens used in transactions that the network has not confirmed. They will then transfer the coins to anonymous addresses and then the altered blockchain would act however they had programmed it to work. Blockchain with a smaller number of participants has been then attacked in this manner but in the case of larger networks like Bitcoin and Ethereum, it makes it nearly impossible to attack due to the costs involved in acquiring 5% of the bitcoin or the staked crypto.
Common Crypto Attacks:
It is a difficult task to attack our blockchain but experienced crypto hackers focus on the other aspect of the crypto ecosystem. Here are some common target crypto hackers let’s look at them and how they attack the cryptocurrency.
Many crypto hackers just try to exploit vulnerabilities in the wallet code of software crypto. Hackers can also use phishing attacks to gain access to personal information from wallet holders. The people who use the met popular mask wallet may have received phishing emails asking for personal information.
Centralized Crypto Exchanges:
Centralized crypto exchanges store billions of dollars worth of crypto, these are the prime targets for hackers. The Mt. GOX hack is the most famous example of a CEX hack in the history of crypto. The scale of the Mt.Gox hack forced the CEXs to give more security and insurance measures in place. High-profile CEXs keep their crypto in the cold storage and most of them use high-security measures like two-factor authentication. However, major exchanges like coin base, Binance, and crypto.com have suffered significant hacks. The CEX technology owns your crypto till you withdraw it to your private wallet. Some CEXs offer many insurance protections but there is never the guarantee they will reimburse customers during a hack.
Smart contracts are blockchain programs that perform various functions without human intervention. A smart contract’s security is only good as its code. If developers miss the details in their smart contract a hacker can modify it and redeem crypto funds. DAO hack is the most common consequential smart contract hack. It refers to the contract-based governance structure prevalent in Defi.
Cross-chain bridges are designed to migrate tokens from one blockchain to another blockchain. The goal of cross-chain bridge is very simple to understand the technology behind it has proven difficult to perfect. Many headline-grabbing crypto hacks in recent years have occurred in this novel technology.
As it is understood that crypto is anonymous so are the hackers. Hackers are often the people who develop the protocols by themselves. Hackers leave a vulnerability and then wait until the amount they can steal grows before exploiting it is always a difficult task to identify the hackers.
Tips to Secure Your Crypto Assets Against Hackers:
As no one can predict the crypto attack but you do not have to think negatively here, yes because there are ways to reduce the odds of losing your digital tokens to hackers and criminals. Here are some important tips for you to consider which will decrease the risk of losing your crypto. These tips will be beneficial for you in the crypto world just keep these in mind and start applying them if you are the user or you are going to enter the crypto world, keep these tips highlighted for you.
1. Never Share your Wallet Private Keys:
The private is given to the ones who have access to the crypto in the digital wallet. Therefore crypto holders must keep the highest importance on guarding their private keys. Make sure to carefully write down this phrase of the words and keep them note in a secure place that you can easily access such as the file proof safe while you are setting up that crypto wallet. You can take screenshots of these passkeys and then save them in a secret place but do not keep them in the device where you are using the crypto wallet.
2. Use Two-Factor Authentication:
High-quality crypto wallets and exchanges will allow users to enable two-factor authentication with an authenticator app like Google authenticator. Add this step to the sign-in process and it will reduce the risk of attack. You will notification email if someone tries to access your wallet if you have enabled the two-factor authentication. So if you are a crypto user must enable two-factor authentication to enhance the safety and security of cryptocurrency.
3. Invest in Hardware Wallet:
Hardware wallets are known as cold wallets and these crypto wallets store your private keys offline mostly in a USB-like device. These devices are not free like other software devices or wallets and they have a lower risk of attacks.
4. Be Aware of Small and Unknown Crypto Projects:
This is the safest option to stick with crypto exchanges, tokens, and other apps that have a large following and a long track record for your success. When the crypto project is small it will be more likely for hackers to get access to the wallet.
How to Secure Your Cryptocurrency?
To secure your cryptocurrency you have to take several steps to keep your cryptocurrency safe from being stolen. There are different types of wallets for cryptocurrency like hot, cold, custodial, and non-custodial wallets. For security purposes, you should not secure your keys on your device as they have a connection and this is always accessible.
The most secure wallets are the non-custodial wallet, they range from a piece of paper with keys written on them, in a safe to a device that uses the passkeys and encryption.
Paper wallets should only be used as a temporary measure because they can be easily damaged. You will find many products that offer you the safety and convenience for your Bitcoin and other cryptocurrencies, but the best and easiest way to ensure that your crypto is safe from hackers and thieves is to remember these rules;
- Your private keys should always be held in cold storage.
- Do not make others access to your keys just do this if you trust someone or you are just comfortable with risks.
- If you want to use the cryptocurrency just transfer the keys you need into the hot wallet and then conduct your transaction then remove them from the hot wallet immediately to keep your keys secure.
- Make sure to check your phone regularly to ensure that they are not degrading. If they are, transfer your keys to a new storage device.
- Make sure to remember the password of your wallet as you may lose the funds if you have forgotten your password.
Cryptocurrency is the World coin committed to improving the safety of cryptocurrency without sacrificing values like decentralization and privacy. Blockchain security is the best thing in the cryptocurrency which usually has the least chance of being attacked by hackers. They will need a high-power computer to target blockchain and its costs are higher which most hackers can’t afford. You can safely use crypto by following the tips and guidelines mentioned in this article. So don’t quit just considering the safety of your wallet, just take the best preventive measures to keep your crypto wallet safe.
Which Cryptocurrency Has Been Hacked?
Cryptocurrencies have worked a lot to resist hacking attempts. However, there have been several 51% attacks on the cryptocurrencies like Bitcoin, Bitcoin Gold, and Ethereum Classic.
Can Someone Steal My Cryptocurrency?
Yes someone can steal your cryptocurrency if you are not taking the proper measures to secure and control your private keys.
Can Hackers Steal Crypto?
Hackers can steal and have stolen crypto. Their favorite targets are exchanges, wallets, and decentralized finance applications because these are the points where there are weaknesses.