Why ICOs are in danger?
Cryptocurrencies reached a market cap of 700 billion dollars in January 2018. It is an attractive market with big growth but at the same time it is a huge attraction for hackers and mischievous people. A user without experience in the CryptoWorld might be unprotected when faced to scams like was the case with CoinDash. As such, events like this draw attention to possible security issues in ICO funding and might provoke new restrictions from Governments, thus disrupting the trust and the growth of the market in general. If this problem wouldn’t be fixed, we will see an increase in frauds related to Blockchain wallets. Beside economic losses related to such hacking activities there are issues on trustworthiness. If these frauds will persist, users will get afraid about investing in ICOs or in Cryptocurrencies.
Because of the issues described above, “smart people” use those vulnerabilities against the users of the Blockchain platform: stealing money from them and disrupting the trust in the Blockchain platforms per se. Just to be clear: The problem discussed above isn’t an error of Blockchain as a technology. It is a human error exploited by human.
A lot of money can be made and a lot of money can be lost. The attack on CoinDash illustrates this. The hackers changed those 42 characters which represent the wallet address but the people who were sending Ethereum couldn’t know that. They were sending their money directly into the felon’s pocket. Only this attack made a damage of more than 7 million dollars.
The hacking of this ICO is reminiscent of 2016 when $50m was stolen in a similar fashion from a project called The DAO. As such, the event will likely again draw attention to possible security issues in ICO funding, amid their escalating popularity.
What solution can we have against those vulnerabilities?
With a simple answer we can fix this and save millions of dollars which belong to CryptoWolrd users. And maybe more important than those millions of dollars, which are just a drop in the Cryptocurrency ocean, is the trust we can bring for the Blockchain industry. If this issue will be fixed, people wouldn’t be afraid to invest in Blockchain projects thus it will become more popular and more attractive.
All we have to do is to implement an alias system for complex Blockchain wallet addresses. When the user will make a transaction in Blockchain (sending Bitcoin, Ethereum, etc.) he will reduce the receiving address from a 42 characters length address to an Alias that is chosen by him and is easy to remember, thus eliminating the probability of an error while introducing the wallet address.
But do we have such an idea implemented in Blockchain?
We have!
CryptoAlias is able to deliver that. Its goal is to give an alias to every wallet in the system, thus preventing users from sending funds to the wrong address, as it’s less likely to mistype a short and simple word than a lengthy string of random characters. In addition, CryptoAlias makes it harder for attackers to trick people into sending them funds. For instance, if an ICO address is replaced, the new address will have a different alias (or none) and will thus be easier to spot. In conclusion, CryptoAlias is able to make Blockchain Safer, more Reliable, more Secure, and save ICOs from scams like the CoinDash one.
