Digital assets safety: a myth still alive
Exchanges hacking in the post-quantum future will rise drastically!
Cryptocurrencies may not rise sharply in value and cost higher than back in 2017, but despite the feverless market, most of these assets are still a highly desired piece of digital treasure. Cryptocurrency exchanges have always been a #1 target for hacking for obvious reasons — huge amounts of money held within each such each platform. Means of security are often updated, but the more they become complex, the more profitable and interesting it becomes for cybercriminals. In the times when everything can be hacked, many seek safe havens for their savings. Crypto wallets may not be safe, so people shift their digital gold to crypto exchanges which highlight their safety measures as the safest up to date. But they are not.
Back in late December 2018, Coindesk published an article revealing that the amount of cryptocurrency stolen from exchanges increased 13 times in 2018 compared to 2017. Analytics company Chainalysis even made a statement in its report that approximately $1 billion worth of cryptocurrency was stolen from digital currency exchanges in 2018 alone! At some point, most of the crypto exchanges had been hacked and in some cases, hackers managed to steal more than $ 500 million at once! Moreover, back in 2018, a report was done indicating that the number of hacked exchanges increased dramatically — reaching nearly 700% rise.
Trust must be earned
Right now, the cryptocurrency market situation is undoubtedly not so impressive. Anyway, some time ago the sharp increase in interest in cryptocurrencies led to dozens of attacks on cryptocurrency services. The number of compromised user accounts of crypto-instruments increased by 369% from 2016 to 2017. Moreover, in January 2018, the number of incidents increased by 689% compared with the average monthly indicator of the year 2017. The report data was provided by the international company Group-IB, specializing in cyber attacks prevention.
Company experts analyzed the theft of 720 user accounts of the 19 largest crypto exchanges and found that the leaders in the number of cyberattack victims were mostly from the United States, Russia, and China. Moreover, 50 active botnets, used for cyber attacks on users of crypto-exchange exchanges, had been identified. The infrastructure used by cybercriminals is mainly based in the USA (56.1%), the Netherlands (21.5%), Ukraine (4.3%) and Russia (3.2%).
At the same time, researchers add, cybercriminals continue to use tools that were previously used to attack banks, and now successfully use them to crack crypto exchanges, wallets, and gain access to personal user data.
The first and foremost reason for successful theft: ignoring of two-factor authentication, both by users and by the exchanges themselves. The second is the neglect of simple security rules, such as the use of complex and unique passwords for various services. The analysis of the sample, consisting of 720 accounts, showed that one in five users considered the password to be shorter than eight characters are sufficient.
The reasons for the hacking are different: errors in the source code of the program, phishing attacks, unauthorized access to the database of users of exchanges, the vulnerability in the storage and withdrawal of funds. However, all of them are the result of insufficient attention to information security and the protection of their digital assets.
The wave-like activation of scammers and the increased attention of hacker groups to the crypto industry, the modification of malicious programs for crypto-currencies, as well as the significant amounts of stolen funds — all these signals that the industry in question is not yet ready to protect itself and its users.
Speaking about the world scale, the reminder needs to be put — as the worldwide crime scene sees a lot of hacking and fraud regarding the holders of main cryptocurrency and other digital assets owners.
Moreover, according to research by Ernst & Young (EY), as a result of hacker attacks over the past year, about 10% of all the money that was raised by the organizers at the time of the initial token placement (ICO) was stolen. On average, out of $ 3.7 billion. About 400 million were stolen by the United States. For some projects, hackers managed to steal up to $ 1.5 million per month. And the fault is sole with the developers. Therefore, is it worth trusting new projects? Your choice.
What should you remember
Out of all this data, it is vital to get a few things into your mind deep enough.
- It is clearly seen that almost every cryptocurrency exchange was hacked at some point during these years. And how many hacks and their attempts, which we do not know about, were unknown?
- Back in 2017, the cryptocurrency community almost did not respond to new exchanges hacking — unlike in 2018.
- The most popular way to hack accounts is phishing and social engineering (using human weaknesses and not knowing scam methods). Attackers disguised as representatives of the exchange gained access to the computers of employees (it could take months to complete this task) and took possession of the keys.
- Collaboration with cryptocurrency exchanges is full of all sorts of unpleasant surprises, ranging from a technical malfunction and a sudden stop to trading, ending with hacking wallets or just losing your crypto.
- There are threats that can be even more frightening. For example, quantum computing, which can hack the blockchain, can surely disrupt and ravage all the existing cryptocurrency platforms literally within a blink of an eye. And this is a forthcoming reality.
Dead end or new hope?
The day when the first quantum computer will connect a cryptocurrency blockchain is coming, therefore, the cryptocurrency market need respective protection. The last factor is often ignored by many due to insufficient knowledge of this complex area. Implementation of the quantum-resistant measures is a must for future blockchain ecosystems. However, we do witness already a rising number of professional teams engaging in the creation of a better future.
The first quantum-safe ecosystem — QUUBE.EXCHANGE — also implements a security token Launchpad with the professional exchange platform allowing STO/ICO projects to fundraise rapidly amongst accredited and non-accredited investors. Operations based on the dedicated STO blockchain designed for investment and custodian institutions. The chain is a safeguard for any other crypto market ecosystems from quantum terminal attacks; all exchange operations and user balances to be recorded on-chain.
The advent of quantum computing technologies indeed poses a major threat to existing blockchain solutions. It’s time to adopt the solutions for the future of the crypto trading today. It’s time for QUUBE.
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