Cryptocurrency is a digital or virtual currency that uses cryptography for security. A key feature of cryptocurrency is that it is decentralized, meaning it is not subject to government or financial institution control.
This has made cryptocurrency a target for hackers, who can exploit its decentralized nature to their advantage. In fact, it’s estimated that $1 billion worth of cryptocurrencies was stolen in 2018 alone!
How do hackers exploit cryptocurrency?
According to oracledispatch.com there are a few ways that hackers can exploit cryptocurrency:
-Targeting exchanges: Hackers can target cryptocurrency exchanges in order to steal user funds. This was the case with the Mt. Gox exchange, which was hacked in 2014 and lost 850,000 bitcoins.
-Phishing: Phishing is a type of online fraud where hackers send fake emails or set up fake websites in order to trick users into revealing their personal information, such as their cryptocurrency wallet address or login credentials.
-Malware: Malware is a type of software that is designed to damage or disable computer systems. Cryptocurrency-related malware includes programs that can steal private keys or infect devices with mining software.
What can you do to keep your cryptocurrency safe from hackers?
There are a few things you can do to protect your cryptocurrency from hackers:
Use a hardware wallet
A hardware wallet is a physical device that stores your private keys and can be used to sign transactions. Hardware wallets are considered to be more secure than software wallets, as they are not connected to the internet and are therefore less susceptible to hacking. However, they can be expensive and may not be available in all countries.
Use a hot wallet
A hot wallet is a software wallet that is connected to the internet. Hot wallets are less secure than hardware wallets, but they are more convenient for day-to-day use. When using a hot wallet, you should only store a small amount of cryptocurrency that you are willing to lose.
Use a cold wallet
A cold wallet is a software wallet that is not connected to the internet. Cold wallets are considered to be the most secure option for storing cryptocurrency, as they are not vulnerable to online attacks. However, they are less convenient to use than hot wallets.
Enable two-factor authentication
Two-factor authentication is an extra layer of security that can be used to protect your accounts. With two-factor authentication, you will need to provide both your password and a one-time code that is generated by an authenticator app in order to login or access your account.
Be careful with Phishing emails and websites
As mentioned above, phishing is a type of online fraud where hackers send fake emails or set up fake websites in order to trick users into revealing their personal information. If you receive an email or visit a website that looks suspicious, do not click on any links or provide any personal information.
Maintain Multiple Wallets
It is also a good idea to maintain multiple wallets with different providersto spread the risk. This way, if one wallet is compromised, you will not lose all of your cryptocurrency.
Change Your Password Regularly
Another good security measure is to change your passwords regularly. This will help to prevent hackers from gaining access to your accounts.
Keep Your Software Up-To-Date
Hackers often exploit security vulnerabilities that are present in outdated software. Therefore, it is important to keep your software up-to-date, as this will help to protect you from security vulnerabilities. You should also install anti-virus and anti-malware software on your devices in order to protect them from malicious software.
Back up your data
In the event that your computer or wallet is compromised, you will want to have a backup of your data so that you can restore your account. You should back up your data offline in order to avoid having it stolen by hackers.
Use a custodial wallet
If you are not comfortable with managing your own private keys, you can use a custodial wallet. Custodial wallets are provided by third-party companies and they will hold your private keys on your behalf. However, this means that you will not have full control over your cryptocurrency and you may have to pay fees in order to use the service.
Social engineering attacks are a type of fraud where hackers exploit human psychology in order to trick people into revealing their personal information or completing a task that will benefit the hacker.
For example, a hacker may send an email that appears to be from a legitimate company and ask the recipient to provide their login credentials. Or, a hacker may call someone and pretend to be from their bank in order to get them to transfer money to an account that the hacker controls.
Do not store your private keys online
As we mentioned above, hardware wallets are considered to be more secure than software wallets as they are not connected to the internet. However, even hardware wallets can be hacked if the attacker has physical access to the device. Therefore, it is important to never store your private keys online, even if you are using a hardware wallet.
Be careful with public Wi-Fi
Public Wi-Fi networks are often not secure, as they can be accessed by anyone. Therefore, it is important to be careful when using public Wi-Fi, as hackers may be able to intercept the data that you are sending and receiving. If possible, you should avoid conducting any sensitive activities on public Wi-Fi, such as logging into your email or cryptocurrency exchange account.
There is no single solution that will protect your cryptocurrency from all threats. However, by using a combination of the above security measures, you can help to keep your cryptocurrency safe from hackers.
However, even if you take all of the necessary precautions, there is always a risk that your account could be compromised. Therefore, it is important to only store a small amount of cryptocurrency in your hot wallet that you are willing to lose.