Updated: Oct 11
What is Cryptocurrency?
I would like to begin this article by first explaining what is Cryptocurrency and why is becoming more common and heard on in an outside tech world.
Cryptocurrency is a form of digital currency that uses cryptography for security and operates independently of a central bank. It is decentralized, meaning that it is not controlled by any government or financial institution, and transactions are recorded on a public ledger called blockchain.
Cryptocurrencies like Bitcoin, Ethereum, and Litecoin are a few of the more popular examples of digital currencies. They are created through a process called mining, which involves using powerful computers to solve complex mathematical problems. The miners are then rewarded with a certain amount of cryptocurrency for their efforts.
One of the key features of cryptocurrency, and one of the reasons hacking it has become popular, is its anonymity and transparency. Transactions are recorded on the blockchain, which is a public ledger accessible to anyone. However, the identities of the individuals involved in the transactions are encrypted, providing a degree of anonymity. This feature has made cryptocurrency a popular choice for individuals who value privacy.
With this being said, and explained, we can now move to a new and world wide threat that is now coming in, Crypto Currency Hacking.
What is Cryptocurrency Hacking?
Crypto currency hacking is an ongoing concern in the world of digital currencies. Despite the many security measures that have been implemented, hackers continue to find ways to steal crypto assets from individuals and businesses. In this article, we will explore the different types of crypto currency hacking and provide insights from experts in the field.
Crypto currency hacking can take many forms, including phishing scams, malware attacks, and direct thefts from crypto wallets and exchanges. These attacks can result in significant financial losses, as was the case with the infamous Mt. Gox hack in 2014, which resulted in the theft of more than $460 million worth of Bitcoin. According to a report by blockchain analytics firm CipherTrace, losses due to crypto currency theft and fraud amounted to $1.9 billion in the first three quarters of 2018. The report notes that "thefts from exchanges continue to be the biggest danger to the ecosystem, accounting for the majority of all crypto currency losses."
These are a few of the forms that can be included in Crypto Currency Hacking.
1.Phishing Scams One of the most common types of crypto currency hacking is phishing scams. These scams involve sending fake emails or messages to individuals or businesses that appear to be from a legitimate source, such as a crypto exchange or wallet provider. The goal of these scams is to trick the recipient into giving up their login credentials, allowing the hacker to access their crypto assets. According to a report by cybersecurity firm CipherTrace, phishing scams were responsible for $30 million in losses in the first quarter of 2021. This represents a 50% increase from the previous quarter. Dave Jevans, CEO of CipherTrace, notes that "phishing attacks continue to be a favorite among cybercriminals targeting the crypto ecosystem." 2. Cryptojacking Cryptojacking is another type of crypto currency hacking that has become increasingly common in recent years. This type of attack involves using malware to hijack a victim's computer or mobile device to mine cryptocurrencies. The victim is often unaware that their device is being used for this purpose, as the malware is designed to run quietly in the background. According to a report by cybersecurity firm Kaspersky, the number of cryptojacking attacks increased by 23% in 2020 compared to the previous year. The report notes that "cryptojacking” is a relatively low-risk, high-reward activity for cybercriminals, which is why we expect to see it continue to grow in popularity."
3. Exchange Hacks Perhaps the most high-profile type of crypto currency hacking is the exchange hack. This type of attack involves stealing crypto assets from a centralized exchange, which serves as a custodian for the assets of its users. These hacks can result in millions or even billions of dollars in losses, as was the case with the infamous Mt. Gox hack in 2014. According to a report by blockchain analytics firm Chainalysis, exchange hacks accounted for $3 billion in losses in 2020. However, the report notes that "the number of exchange hacks has declined over the past few years, as exchanges have improved their security measures."
In conclusion, crypto currency hacking remains a significant threat to individuals and businesses in the digital currency ecosystem. As the value of crypto assets continues to rise, it is likely that hackers will continue to find new and creative ways to steal them. It is essential for individuals and businesses to remain vigilant and take steps to protect their crypto assets from these types of attacks. This includes using strong passwords, enabling two-factor authentication, and using reputable crypto exchanges and wallet providers. Author
Sources: - CipherTrace, "Cryptocurrency Anti-Money Laundering Report, Q3 2018"
- CoinDesk, "Crypto Crime Could Reach $1.5 Billion in 2018, Says Cybersecurity Report" - https://www.coindesk.com/crypto-cr
-Kaspersky, “What is cryptocurrency and how does it work?”
-Kaspersky, “What is Cryptojacking?” What is Cryptojacking & How does it work? (kaspersky.com)