Crypto Hacking: How Did it Really Happen?

You may hear or read news about hacking incidents that Poly Network lost $610 million worth of cryptos that affected many user accounts and the hacker then return $342 million just for fun.

How did it happen and does it mean cryptocurrencies are no longer safe?

Let’s dive into hacking incidents about what really happened. But before we did, why do hackers want to break cryptos?

Crypto was created by hackers

The cryptocurrency was created by hackers who specialized in cryptography technology. In other words, cryptocurrency itself is unhackable. Its blockchain, wallet technology, and mining processes are secured. What is hackable is where crypto temporarily parks - the exchange platform.

Private key matters

The old saying from the crypto world stated “Not Your Keys Not Your Coins”. Because of the uniqueness of the hash function that generates pair of keys through hashing algorithm SHA-256, it may take the fastest computer to spend thousands of years to crack your private key. Yet the private key is only the most important key you want to have in order to open your crypto wallet.

Hackers want your private key

There are many ways hackers want your private key as long as your wallet is hot (connected to the internet).

Ransomware is the most common cyber-attack. Hackers may install ransomware through a website or email you are clicked in order to obtain your private key in your computer hard drive.

However, this method is indirect and will take a longer time for someone to click the ransomware. Direct attack is more efficient. The target is likely someplace without any guardians to protect assets.

Dangerous of exchange platform

Therefore, the crypto exchange platform is the most frequent attack place. Unlike crypto wallets that already has secured by hash algorithms, the crypto exchange platform is an open-door policy that invites hackers to visit.

You only need a password to access the exchange platform and crypto-only park there for transience use before the trade to another type of cryptos. 

The exchange platform is particularly dangerous because they invest less money in cybersecurity and focus more on trading. Unless they got hacked and then spent money to upgrade their system, they will continue doing what they used to do.

Exchange platforms unlike wallet parks massive amounts of crypto in the pool which hackers can steal the whole package rather than an individual wallet with a fraction amount of crypto.

Poly Network Hacking Incidence

Poly Network is a service to the link between different crypto protocols. They are crypto exchange platforms alike. Therefore, hackers love to visit them especially they parked large amounts of crypto on their platform.

How to secure your crypto assets?

Non-custodial wallet

If you have a non-custodial wallet or your responsibility for your private key, here are what you may want to do:

Store your private key in the proper place: put your private key in a place that the internet cannot reach

Use a safe computer operation system: update your computer frequently

Use a safe browser: update your browser frequently

Use a safe email address: use well-known email address providers

Use anti-virus software: frequently update your anti-virus software

Do not use free VPN unless necessary: free VPN will create a focal point for hackers to play with

Shut down the computer if you do not use it or shut down the internet if you are off the computer

The list can go longer than this.

Custodial wallet

Or you may want to spend a bit more money to have a custodial wallet such as Coinbase.

You may also want to have a vault with multiple key holders if you have large sums of cryptos that intend to share with others.

In conclusion

Do not put your large sums of crypto in the exchange platform overnight. Hackers love to explore and poke exchange platforms as they are easily cracked. More and more hacking may likely happen in the future along with the rise of crypto prices, at least, you want to protect your assets and put them in a safe place. 

Photo by Fabio Lucas on Unsplash
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Disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose cryptocurrencies are mentioned in this article. This information is only for educational