Cryptocurrency has become very popular. Many people are piling up the currency and there is an alarming need for security measures to keep your wallets and investment portfolios safe. Nowadays education and awareness on Cryptocurrency security is the need as there are numerous attempts to obtain the digital currencies by illegal means like phishing, scamming, or hacking, or the measures to prevent unauthorized cryptocurrency transactions, and storage technologies. So here Crypto Currency Security has the answer to everything.
What is cryptocurrency?
Cryptocurrencies emerged as a side product of digital cash.
Satoshi Nakamoto is the unknown inventor of Bitcoin-the first and still most important cryptocurrency.He never intended to invent a currency. He had developed “A Peer-to-Peer Electronic Cash System”. All the centralized attempts had failed. So Satoshi tried to build a digital cash system without a central entity. The single most important part of Satoshi‘s invention was that he found a way to build a decentralized digital cash system.
Cryptocurrencies are entries about token in a decentralized consensus-databases. Since the consensus-keeping process is secured by strong cryptography-they are known as CRYPTOcurrencies. Cryptocurrencies are built on cryptography. They are secured by maths, not by people or by a trust. What we need to separate is -between transactional and monetary properties. Most of the cryptocurrencies share a common set of properties, yet they are not carved out anywhere.
CryptoCurrency Security Standard (CCSS) –
It is a security standard that helps to secure all information systems that use cryptocurrencies. Standardizing the security techniques and methodologies used by cryptocurrency systems will enable educated decisions about the products, services, and companies people wish to align with.
A very simple definition of cryptocurrency is-they are limited entries in a database that no one can change without fulfilling specific conditions.
“All the hackers in the world are targeting cryptocurrencies.”
-Eric Larcheveque, CEO of cryptocurrency security company Ledger Wallet
Currently, there are more than 3 million bitcoins that have been lost, according to blockchain tracking company Chainalysis.
Even more alarming: cryptocurrencies are a dream for cybercriminals.
cnbc.com/security issues reach a peak within cryptocurrencies
Some problems and risks of crypto currencies-
Cryptocurrency security threats:
Cryptocurrencies are similar to e-money — like WebMoney or PayPal. Therefore the same problems as e-payment systems.
The operating principles which are more specific to cryptocurrencies make the problems likely to occur. These same principles are accountable for a number of risks unique to cryptocurrencies.
- Spoofing payment information
Let us start with the most common problem -plain old theft.
Example: you are transferring money to a friend.
You copy his wallet address accurately, but the malware replaces the copied address in the clipboard with another one.
Now, not every user is vigilant to double check the address after copying it.
Especially if the address is a long jumble of characters.
Next-let us talk about phishing.
As with ordinary e-money, users can be tricked into going to a phishing website. Assuming it to be a real one they upload their crypto wallets and enter a password.
No doubt, the traditional banking or payment system can also run into traps with cyberthieves. Here, in a traditional system, there is always a good chance of canceling the transfer.
Here, in the case of cryptocurrencies, you might complain to the United Nations. Then, what happens in blockchain stays in the blockchain.
3.Spoofing a user address
A money-grabbing scheme is simpler. Usually, the collection of funds in an ICO opens at a specified time and closes when the required amount has been collected.
This collection address is posted on the project website when it opens (just common practice).
Taking one real example:
In an ICO, a hacker got access to the project website.As soon as collection opened, he replaced the project website address with his own address. Within an hour, 2,000 participants had thrown in $8 million into his address.
Then finally the address was flagged as fake. Even that did not stop the eager crypto-investors. A lot more of them continued to transfer money to the same fake address, and the hacker got another $2 million that same day.
4.Hacking a payment gateway for real innocent users
As already discussed the risks are numerous and unknown especially with hackers.
Even though you are using a genuine payment gateway with the correct address you can result in a loss of money.
Citing an example of cryptocurrency security threat:
In June 2017, the popular Web wallet for the Ethereum Classic cryptocurrency, classicetherwallet.com suddenly had started stealing money from users’ wallets.
It then turned out that hackers had used social-engineering methods to convince the hosting provider that they were the real domain owners. After gaining access, they started intercepting cash flows.
As it is said in haste even thieves leave their footprints for errors.
The strategy those hackers used was not the best one. They replaced the payees immediately, quickly blowing their cover and managing to steal only $300,000 in several hours.
Moreover, if they had collected the wallets and kept patience and waited a while, they would have remained undetected for a lot longer time, and the damage would have been far far worse.
In 2017 in Brazil hackers had hijacked a whole bank.
- User address error
Cryptocurrencies add to their own set of wrinkles.
How? There is a risk that is very specific to cryptocurrencies. Loss of money due to an error in the address to which the money transfer is made.
With Ethereum, if the last digit of the address wasn’t copied, the money would disappear into thin air. Or it would go where it was supposed to, but the amount you intended to transfer would be it multiplied by 256.
This error is not relevant to Bitcoin. Its system has built-in address validation. But, in Bitcoin, you might send money to a mystery recipient.
6.Loss of a wallet file
One typical problem with cryptocurrency is-loss or theft of a wallet. Most users store their cryptocurrency wallet files on their computers. Therefore, they can be easily stolen using malware or lost if the hard disk crashes.
Therefore to be at a safe side most advanced users make hard copies of their secret key. They purchase USB hardware wallets and store their hard copies here. Unfortunately, the number of such users is really small.
The situation with centralized e-money is far better at present. It’s the rare Internet bank that doesn’t require two-way authentication and confirmation of transactions using an SMS with one-time-use passwords. And in the case of corporations or large amounts, the use of a USB token is mandatory.
In the previous year, investing in projects associated with a blockchain or cryptocurrencies became very popular among cryptocurrency holders. This type of fundraising is known an ICO — Initial Coin Offering.
Some handy and must follow tips for cryptocurrency holders and crypto-investors for cryptocurrency security:
How can users avoid the above-mentioned problems?
By following these tips:
- Remember to always verify a Web wallet’s address. Don’t follow links to an Internet bank or Web Wallet.
- Remember during a transaction – before sending,
A) Double-check the recipient’s address (at least check the first and last characters),
B) The amount being sent, and
C) The size of the associated fee.
- Remember to always write down a mnemonic phrase that allows you to recover a crypto wallet if you lose it or forget your password.
- Remember to always keep a cool head and to make informed decisions when crypto-investing. Don’t panic or hurry during investing.
- Remember that crypto-investment is very risky.
A) Do not invest more than you’re ready to lose at any moment.
B) Diversify your investments.
- Remember – Use cryptocurrency hardware wallets to store your cryptocurrency offline. Even though they are for a good cost, the investment is worth it.
- Remember to run high-quality antivirus protection to protect the devices you use to access crypto wallets, trade on crypto-exchanges, and so on.
Last but not the least:
The upshot is that using cryptocurrencies has made it easy to raise outrageous amounts of funds with nothing more than an Internet connection. More than $1.7 billion has already been raised through ICOs in 2017.
The problem is that the cryptocurrency market still isn’t regulated by any means, there are no risk assessment mechanisms, and there is no guarantee — like at all — of return on investments, except the word of honor of people who came up with the project.
Some links for transactions:
Coin Delta; Koinex; Coin One; Coinbase; Binance
cryptoconsortium.org, kaspersky.com, securityintelligence.com