Updated: May 19, 2020
We all know that Blockchain Technology has many benefits compared to traditional systems. One of those benefits is to mitigate the risk of a cyber attack/hack.
What’s the most common cause of crypto hacks today?
The most common cause of crypto hacks is to steal cryptocurrency through various methods/types of hacking attacks. The main type of attack is called “Dusting.” Here, hackers send “dust,” which is an extremely small amount of cryptocurrency, to various wallet addresses. The hackers then analyze the transactions in order to figure out what addresses belong to the same wallet. Next, the hackers can link the wallets to their owners. From here, it’s up the hackers' preferred method of obtaining information from the owners, commonly through phishing or extortion threats.
What’s the number one thing users can do to mitigate their risk?
Possibly, the best way for users to mitigate their risk of any hack is to be as careful as possible with the information they put out onto the internet. It is highly recommended that all users of any system adopt the latest information security protocols and be very careful and vigilant with their information and with whom they share that information. This way, in the event that a user is hacked, the hackers will not have enough information that could cause serious damage to the victim.
Regarding the Dusting attacks, users can protect themselves by being wary of very low amounts of cryptocurrency in their wallets. By not making any transfers of these low amounts, called “dust,” they can prevent the transactions from being analyzed and marked by hackers. Another method is for users to utilize cold storage wallet options that can only be accessed when the user takes them online.
What’s the number one thing companies can do to protect their customers and mitigate risk?
Companies can protect their customers and mitigate the risk of hacking by adopting the latest information security protocols. This means that companies have to protect their users’ data and ask for the least amount of data from their users as possible. By securing users’ data with the latest protocols and working with cybersecurity firms, or having an in-house division, ensures that companies are always up to date with the latest types of hacking attacks and moving their users’ data around to prevent it from ever falling into the wrong hands, and by having as little data as possible regarding their users, the company is protecting its users from losing enough information that can be useful to a hacker.
What are the most common mistakes you see crypto companies make when it comes to security?
The most common mistake I have seen crypto-companies make when it comes to security is to keep their users’ data in a centralized location protected by private keys that are not managed properly. Unfortunately, this has resulted in those keys being accessed by hackers and the exchange then loses the protection of their users and even wallet keys essentially giving the hackers access to the cryptocurrency in those wallets.
Is decentralization the solution? Why or why not?
When it comes to centralized vs. decentralized hacking, there is no doubt that decentralized systems have a lower probability of being hacked. This is due to the fact that decentralized transactions are recorded on a distributed ledger surrounded by a large number of other transactions that are all maintained by master nodes which are difficult to tamper with. In a centralized system, there is a central point of control which becomes the target for the hacks in which the hackers then gain access to a system or database of users’ information.