Cryptocurrencies have gained acceptance recently among investors and traders, along with tech enthusiasts. Since they are decentralized, promises regarding free circulation outside the conventional financial system make promises of the alternative for money in the near future. Just like every other financial system, security is the issue of the present time.
The most recurrent question that crosses people’s minds when entering this new world of cryptocurrency is: Can cryptocurrency be hacked?
This blog post shall outline the possibility of crypto hacks, how these hacks occur, and most importantly, how one can protect the cryptocurrency from probable threats.
Is Cryptocurrency Hacked?
Yes, but even though I am almost ignorant of this fact, the blockchain, in which cryptocurrencies lie, itself is pretty much unbreakable. Once it is engraved within the blockchain, the transaction will be greatly secured, as a transaction can’t be easily modified to be something else. Hackers look for information by seeking the vulnerability points of such infrastructures, which include exchange, wallet, and private accounts.
We can just be talking over debating the theme of crypto hacks that can be made useful based on the various kinds of attacks.
Exchange Hacks: Cryptocurrency exchanges form an exchange platform through which one can buy, sell, and even trade in other digital assets. Such exchanges are normally common hacking points since there is a huge accumulation of cryptocurrencies. If the hackers successfully find out a vulnerable point within the exchange system, they might reach one’s wallet and steal the money. The most prominent of them were over millions in lost cryptocurrencies.
Wallet hacks: The blockchain has good security; however, time to time users abuse wallets, and compromised wallets will become hackable.
User failure in that 2-FA: Another reason is due to the forgotten password or user failure in that 2-FA that easily compromises the user’s wallets as well online and offline.
Phishing scams: These are the most common method hackers use to get cryptocurrencies. Here, hackers pretend to own websites, emails, and even social media accounts to compel people to hand over their private keys or login information. In such scenarios, using the information obtained from phishing scams, they may steal your wallet and withdraw all the funds from it.
51% Attacks In this type of attack, the attacker owns mining power over 50% of the power on a blockchain network. From this position, he can tamper with the blockchain, reverse transactions, and spend coins doubly.
Hardware wallets: This is the safest storage of your cryptocurrencies. By hardware wallet is a piece of hardware equipment holding your private key offline such that hacking could be limited to online attacks. Among the famous hardware wallets available, are Ledger and Trezor; the former keeps the highest form of security in guarantee.
Keep Two-Factor Authentication (2FA) enabled on your exchange accounts and wallets. This sends a verification, such as a code to your phone, in addition to your password. Even though he gets your password, he cannot log in to your account because he doesn’t have the second factor.
Use Strong Passwords Never Reuse: All your accounts should be secured using a very strong, unique password. A password needs to be unguessable; never reuse the same password on sites and applications. You can even create very complex passwords with the help of a password manager.
Keep a sharp eye out for phishing scams: Never click on links coming from unknown sources or download attachments. In the crypto world, phishing scams are so numerous, and hackers love to mask themselves as the real companies or platforms. Hence, there is a need to make sure that one checks all URLs before submitting any information since it must be the original site.
Probably the most important thing about a cryptocurrency wallet is knowing how to keep a private key safely. Never allow your private key to reach someone else. Make it some securely offline backup or store on a hardware wallet and therefore prevent the key from ending up in the wrong person’s hands.
Always check your wallets and exchange accounts for malicious activity. Most of these interfaces send alerts or login information whenever someone enters the account fraudulently. Whenever you experience something weird, you should respond in time to salvage your accounts.
Shared holding: A portfolio can be diversified by sharing holding over a number of wallets and platforms. This will help to minimize damage in case of any specific security breach.
Future of Cryptocurrency Safety:
Safety improvement is attracted by the continuous growth of the cryptocurrency markets. As new features and protocols are added to a blockchain, innovative blockchain technologies continue to increase because the ongoing efforts of securing one’s digital assets cannot be contained. The newest blockchain uses the most advanced consensus mechanism. Proof of Stake is a bit more resistant to attacks through 51 percent than the earlier techniques.
But still, security will always be shared between developers, exchanges, and even people themselves. But even saying that a blockchain may be secure, but it’s probably a human error or terrible security practices that hackers typically use because of crypto. Just be careful about your cryptocurrency investment and learn from a little bit of vigilance.
Final Words
In a nutshell, hacking shall be losing your digital assets, but the best security practices reduce the risk. Hardware wallets, two-factor authentication, awareness about phishing scams, and careful private keys will keep you safe in the crypto world.