Cryptocurrency presents a number of beneficial potentials; nevertheless, due to the fact that it is still relatively new and there is a significant amount of money involved, it is appealing to hackers. There have been numerous high-profile breaches in the history of cryptocurrency, each of which resulted in losses of thousands or billions of dollars.
Hackers were responsible for the complete loss of crypto assets held by a number of enterprises, startups, and investors.
So how exactly is bitcoin vulnerable to hacking, and what can individuals do to safeguard their digital assets? Learning more about cryptocurrency hacks will help you protect the cryptocurrency you’ve worked so hard to accumulate.
Why Is It Hard To Attack Blockchain?
What makes attacking a blockchain so challenging? Because they are not centralised, blockchains are designed to operate without the possibility of a single point of failure.
Additionally, cryptocurrency security is bolstered by the use of cutting-edge cryptography, public ledgers, plus consensus procedures.
To the public, all Bitcoin (BTC) and other blockchain transaction records are available. The whole Bitcoin transaction history must be downloaded by everyone who wishes to host a station on the Bitcoin blockchain. This extreme openness aids in preventing invalid transactions from being sent by malevolent operations.
Members of a blockchain network can verify transactions without involving a central authority by using consensus procedures like proof-of-work (PoW) & proof-of-stake (PoS).
In order to verify new blockchain transactions, Proof-of-Work (PoW) requires computers to solve difficult computational challenges. To confirm a new transaction on a PoS network, validators must lock cryptographic assets on the blockchain.
The miners and stakers on a blockchain have financial incentives to act ethically. If validators and miners do their jobs, they will be rewarded with tokens. In fact, if a PoS chain finds an erroneous transaction, it will “slash” the validator’s crypto and render it useless.
To compromise a PoW chain, an attacker would need to control resources equivalent to half the network. For PoS to work, a hacker would have to wager more than 50% of the whole staking pool.
Even if blockchain hacking is theoretically conceivable, huge networks such as Bitcoin and Ethereum make it extremely unlikely (ETH). If a hacker were to try to taint a blockchain, they would probably target less popular altcoins.
Is It Possible To Hack Cryptocurrencies Owing To The Vulnerabilities Caused By Bugs?
In addition to 51% of assaults, skilled hackers may take advantage of weaknesses they discover in the coding of a blockchain. When creating their projects using blockchain technology, blockchain engineers always run the danger of making mistakes. In the event that the developers do not find these faults in a timely manner, it may result in losses that amount to millions of dollars.
However, blockchains that have been through multiple iterations of the testing process, such as Bitcoin, are more resistant to bug exploitation than smaller blockchains.
For instance, in 2022, hackers from North Korea were able to compromise the newly introduced Ronin blockchain and make more than 620 million dollars.
This Ethereum sidechain was developed by the Vietnamese business Sky Mavis in order to lower the gas prices associated with their popular play-to-earn application Axie Infinity.
Advice On How To Protect Your Cryptocurrency Investments From Cyberattacks
There is no way to know when a crypto attack will occur, but there are steps you can do to lessen the likelihood that you will have your digital tokens stolen by cybercriminals. The following pieces of guidance can assist you in lowering the chance that you’ll lose your cryptocurrency holdings:
Never Give Anyone Else The Private Keys To Your Wallet:
Anyone who possesses the private keys will have access to the cryptocurrency stored in a digital wallet. As a result, owners of cryptocurrency ought to place the utmost significance on the protection of their private keys.
When creating a cryptocurrency wallet through reliable trading bots like bitcoin prime, it is important to carefully jot down this set of words and store the note in a safe location, such as a safe that is resistant to fire.
Use a process called Two-Factor Authentication (2FA):
Users of good cryptocurrency wallets and deals should be able to use an authenticator app like Google Authenticator to set up two-factor authentication.
The chance of being hacked is decreased by the addition of this second phase to the sign-in process.
Spend Your Money On A Hardware Wallet:
Hardware cryptocurrency wallets, which are also known as “cold wallets,” keep your personal keys offsite in a device similar to a USB stick.
These hardware wallets, in contrast to the vast majority of software wallets, do not cost anything to use, but they do present a lesser danger of being hacked.
Be Aware Of Less Well-Known And Smaller Cryptocurrency Projects:
Sticking with cryptocurrency exchanges like Bitcoin.com.au, coins, and dApps (decentralised apps) that already have a sizable user base and a proven history of financial viability is the most prudent course of action. There is a correlation between the size of a crypto project and the likelihood that it will be an accessible target for attackers.
The Silver Lining
When compared to previous forms of digital payment, one of the opportunities that Bitcoin and its descendants (such as Ethereum, Ripple, etc.) promise to offer is increased levels of security. As a matter of fact, due to the sophisticated architecture of Bitcoin and other blockchain technologies, it is extremely difficult to damage their networks. Despite this, hackers are nonetheless willing to exploit some solutions for the purpose of making illegal financial gain.
Despite this, prospective users should not be deterred from using cryptocurrencies if they have any intention of incorporating them into their daily lives in any significant way. Following a set of safety best practices can dramatically improve the safety of one’s cryptocurrencies, encouraging attackers to pick alternative targets that are more susceptible to attack.
