• Over $3 billion in hacking loot in 2022
• Investors should keep their assets as safe as possible
• Cold wallets offer fewer attack opportunities than hot wallets
Record year for crypto hacks
The year 2022 is likely to be another banner year for crypto hackers. According to Chainalysis, as of October 12, crypto hackers have already stolen over $3 billion through 125 hacks. The month of October particularly stands out. According to this, October would be the month most affected by hacks this year. Between October 1 and October 12 alone, a total of US$718 million was allegedly stolen by eleven different hackers. Defi projects are the most common victims of hacking attacks, at over 90%. According to Kim Grauer, head of research at Chainalysis, hackers are doing so well mainly because too few resources are currently devoted to cybersecurity.
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Here’s how investors can protect themselves
In order not to fall victim to hacking attacks, BTC-ECHO recommends taking five security precautions that are particularly important for crypto investors. First, you need to make sure that you only buy cryptocurrencies from reputable providers. There are many ways to buy cryptocurrencies in the crypto market and many crypto exchanges differ in their functions. Additionally, it has been the case in the past for owners of centralized platforms to simply shut down and flee with investor funds, so choosing a reputable provider is key.
Another essential step in terms of security are strong passwords. Access data consisting of your own name, date of birth or similar personal information is easy for hackers to decipher. The Federal Office for Information Security and Technology explains: “Hackers have tools that fully automatically test all possible character combinations, test entire dictionaries with common combinations of words and numbers or attempt to access data published on the Internet in all possible combinations. To avoid this, a Password meets certain quality requirements and can only be used for one access.” In order to make the password as secure as possible, you should use a variety of different letters, numbers, and symbols.
If the password consists of a combination of secure and strong characters, the first step has already been taken. However, according to BTC-ECHO, security can be enhanced with two-factor authentication. With this method, which most wallets have, the user’s identity is verified during the login process. If the password was not sufficiently secure, the user account is protected by an additional security measure. If it is biometric data, such as facial recognition and fingerprint reading software, it is almost impossible for hackers to circumvent this measure.
Also, one should not rely on third-party services to store their digital assets. Instead, you should hold your own cryptocurrency, i.e. be your own bank. With self-custody, investors have full power over their digital assets, which means users have full control over sending, receiving, and storing their cryptocurrency. This is possible by using wallets.
Finally, extreme caution should always be exercised against crypto scams. Because all the security measures listed are of no use if a fraudster accesses them through false trust. There are different types of scams to watch out for. These include cryptocurrency scams, cryptocurrency blackmail scams, social media cryptocurrency scams, free cryptocurrency scams, fake app scams, romance scams and phishing scams.
Hot or cold wallet
If you take security measures to heart, you are a little safer from crypto scammers. However, there are also things to consider when choosing the right wallet in terms of security. The important question is: do you choose a hot or cold wallet? Hot wallets have the advantage of offering their users a high level of comfort, as WiWo explains. Since the wallet is permanently connected to the Internet, users can exchange their coins quickly and easily via different devices. This is especially useful for users who trade regularly and want to react quickly to changing prices. But even though the security level of these wallets is very high, this constant internet connection is also a popular target for hackers. As BTC-ECHO explains, cold wallets in turn offer the advantage that these potential attackers have fewer opportunities to attack. The reason is that these terminals work without internet access and hackers could only access them offline.
E. Schmal/Writing finanzen.net
Image sources: knipsdesign / Shutterstock.com, BSDEX