When bitcoin, the first cryptocurrency, was created, it became a symbol of financial and technical security. However, recent events have shown that cryptocurrency funds are, in fact, susceptible to hacks.
Cybercriminals have devised several methods to siphon digital currency funds from victims. With every significant increase in crypto value, there is a corresponding rise in digital currency crime. In 2017, The Telegraph newspaper estimated that 10% of all crypto investors are likely to have their funds stolen.
How Hackers can steal your Digital Currency Funds
- Digital Currency Exchange Hacks
Since crypto exchanges house a wealth of cryptocurrency, they’re frequently targeted by hackers. Exchanges store users’ private keys and use hot wallets, which are always connected to the internet. However, a wallet that is always online becomes vulnerable to all sorts of cyber threats.
High-profile crypto exchange hacks have plagued the digital currency space for 90% of the time bitcoin has been in existence.
- Cryptocurrency Phishing
Phishing is the theft of login details by a hacker using a cloned webpage. The hacker usually sends an email containing an urgent message that drives the unsuspecting victim to log in. The link in the email will contain a page similar to that of an original website which the victim has an account on.
Immediately the private key or log in details are inserted, the hacker will receive it.
- Clipboard Hijacking
When you intend to send cryptocurrency from one wallet to another, you copy the receiving address from your clipboard. Public crypto addresses are long, and most individuals don’t bother to check them. Hackers are exploiting this behavior by using clipboard hijackers.
This malware tool covertly changes the address you’re sending your crypto funds to that of the hacker. Some are so sophisticated that they only change the last part of the address, making it unnoticeable.
Making it Difficult for Hackers to Penetrate security
- Use a Hardware Wallet
Hardware wallets are considered the safest form of storing crypto funds. They allow ease of transactions with reduced risk.
While digital currency exchanges use hot wallets, hardware wallets make use of cold wallets. This way, your private keys remain offline, increasing the security of your funds. Hardware wallets are so secure that even when the wallet is connected to a computer infected with malware, your private key would not be compromised.
- Use a VPN
A VPN is a tool that ensures the privacy of your internet connection, even from your internet service provider and the government. In essence, using this tool will protect you from hackers.
Sometimes, hackers track crypto users with their IP addresses to infect them with malware or send phishing emails. By downloading a VPN and connecting to any of its servers, your device’s IP address changes, and your online identity is therefore protected, making it difficult for hackers to access your personal data connected to the blockchain.
Another benefit of using a VPN includes bypassing geo-restrictions to use different crypto exchange services across the world.
- Avoid Opening Suspicious Emails
Cryptocurrency private keys can be phished through suspicious emails. Some emails also contain malware that can steal your funds. Before you open an email, ensure that you recognize the sending email address.
There are phishing websites that can copy the URLs of legitimate crypto wallets. Look carefully at the sender’s address to verify that it matches that of the cryptocurrency exchange service you’re using. Also, avoid download attachments from senders you don’t know. It could contain malware.