Cryptocurrency Security 101, How to protect yourself

When it comes to cryptocurrencies, they can be the most revolutionary pieces of technology in the world. They are almost completely private and allow people to move large amounts of money globally.

However, given how private they are they are also easy targets for hackers. They cannot are tracked and the transactions that are placed cannot be reversed. Once the funds have left the wallet, there is no way of you getting the money back.

This means that we have seen an explosion in this type of hacks where people have lost a great deal of money. They have fallen victim to numerous phishing scams as well as having had their coins stolen on an exchange.

We will go over the most important aspects of cryptocurrency security such that you can reduce your chances of ever falling victim to any sort of hack attack. We will go over a list of some of the most important hack attacks and then how to protect yourself.

The Exchange Hack Attack

One of the most lucrative hacks that can be undertaken are those that hit large and centralized exchanges. In these cases, the hacker is able to infiltrate the exchange and remove any of the coins that are placed in their wallets.

There are numerous examples of how this has taken place and some of the most well known are the attack on the Mt. Gox exchange in 2014 as well as the hit on the Japanese exchange where millions of NEM was stolen.

In most of these cases, it is down to the exchange to make sure that they have the best security protocols in place to ensure that this does not happen. Unfortunately, this is not something that can be controlled by the individual.

This is why it is really important that you take the time to secure all of your funds off of an exchange. It is the number one rule in cryptocurrencies. When you do not hold the private keys to your wallet, then you do not own the crypto.

Malware that Steals

If you store your coins on your PC, then you could face the risk of attack from Malware. Malware could do a number of things if it is able to get hold of your coins. These range from simple private key thefts to phishing and wallet switching attacks.

In the case of the Malware that will steal your private keys, once it lands on your PC, it will execute some script that will try and connect to some server that is under the control of the hacker. It will scan all of your files and look for your wallet .dat files. Once is has these, it will send them to the hacker’s server.

The other type of Malware is able to do something that will alter the wallets that you copy from addresses. The copied wallet address is stored on the ram of the PC and their malware will merely toggle the address to their own.

In order to avoid the risk that you may face from this malware, you have to make certain that you do not download any dangerous files on the websites. This includes a number of executed files in windows. They will often claim that the file in question is some sort of an invoice that requires your attention.

Phishing Attacks

These are also really popular attacks that they rely on the user accidentally given their credentials or private keys to a hacker in error. These usually happen in the case when the user is trying to visit an exchange or invest in an ICO.

They will try to make it look like they are the company in question by either changing the domain making it look legitimate or by hacking the DNS server of the company in question. In fact, this is exactly what happened in the case of Etherdelta.

It can be quite hard to avoid a situation where you are being duped as to the destination of the funds. However, there are a number of things that you can do to make certain that the address you are sending to as well as the site are legitimate.

Firstly, you have to check that the domain that you are visiting is indeed the correct one. Make certain there are no funny characters in the domain request. Moreover, do not give your private keys over to a website as these are rarely ever required.

There are also many of these people that will operate in on twitter and try to make you hand over some important information regarding your wallet. They will often try to impersonate some celebrity in the community. Try to avoid this as much as you can.

Conclusion

When it comes to hack attacks that steal your coins, a lot of the time it comes down to your own lack of oversight that will eventually result in your funds being stolen. Hence, before you ever send funds, it helps to take a second thought.

Sometimes this can save you a great deal of funds. Don’t just send funds quickly for fear of missing out on some ICO or some really interesting offer. If they sound too good to be true then they most likely are.

This can also be said for the case when you have funds that are stolen through malware. Don’t download any files on your PC from an untrusted source. These are avoidable as you are responsible for what is placed on your PC.

Get some of the most advanced virus scanning software. These can sometimes be annoying but in the long run, it could save you a great deal of money.

Be safe, hold your private keys and never trust anyone!

4 Responses

  1. Saidy says:

    It is down to individual responsibility. Some people are smart and know not to leave their coins on an exchange. There are many others who are quite frankly idiots and deserve it.

    • Elizabeth says:

      Agreed Saidy. There are many people, however, who do not have the best amount of sense and hence will allow this to happen to them.

  2. John says:

    I lost money on mt gox. It was one of the most shocking experiences of my life and left me scarred. Why did they allow that to happen?

    • Elizabeth says:

      They kept their funds in hot wallets on their servers with so little oversight. Hence, they failed their client’s safety.

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