Cryptocurrency
Last year saw the worst wave of hacking ever
Last year saw the worst wave of cryptocurrency hacks ever, according to a recent report by analytics firm Chainalysis.
Cryptocurrency hackers stole $3.8 billion in 2022, according to a report by the blockchain analytics company, up from $3.3 billion in 2021, while October witnessed the highest number of breaches in the crypto sector for a single month, with $775.7 million stolen in 32 months. a separate attack.
DeFi protocols
Decentralized finance protocols, known as “DeFi” protocols, account for about 82%, or $3.1 billion, of all cryptocurrencies stolen by hackers in 2022, according to the report.
DeFi protocols contain a string of codes that define how virtual currency will be used on a blockchain network.
For example, for smart contracts, which are digital contracts that represent the underlying technologies that allow cryptographic transactions to take place, they operate according to a set of conditional commands, including: “since then”; If it is ‘X’, do ‘Y’.
Within the decentralized finance protocol, smart contracts are publicly viewable sets of instructions that allow users to borrow, lend, or conduct transactions without an intermediary.
Once the user fulfills the terms and conditions of the smart contract, the transaction takes place automatically, similar to a vending machine.
According to the report, the majority of digital money was stolen from cross-chain “crypto-bridging” applications, as these programs allow users to move their cryptocurrency between different blockchains.
Cross-chain bridges can also be an attractive target for hackers because when users deposit their digital currencies into smart contracts to be transferred to another “blockchain,” the smart contracts become somewhat of a central store.
“Nowhere is this area more attractive,” Chainalysis said in its report. “If the bridge becomes large enough, any bug in the underlying smart contract code or other potential vulnerability will almost certainly be discovered and eventually exploited by hackers.” As reported by CNBC, and viewed by Al Arabiya.net.
Cryptocurrency protection
Users should thoroughly research and examine the software that is being used to transfer or store cryptocurrencies.
And there are virtual wallets that can safely store your cryptocurrencies and secure them against online attacks, according to Max Krobyshev, co-founder and head of CoinsPaid crypto payment system.
However, it is important to first determine what type of wallet is right for you.
“When it comes to mitigating the risk of digital piracy, many of the problems stem from a lack of security,” said David Schwed, chief operating officer of cybersecurity firm Halborn.
He added, “The decentralized finance community generally does not demand better insurance, as most users resort to high-return protocols, but these incentives lead to problems in the future.”
Instead, DeFi developers would be smart to borrow the security strategies traditional financial institutions use to better protect their platforms.
These include testing protocols with simulated attacks, closely monitoring the blockchain for suspicious activity, and building processes that will stop transactions if suspicious activity is detected, Schwed said.
“Decentralized finance protocols will benefit greatly from adopting better security in order for the ecosystem to grow and thrive and eventually break through to the mainstream,” the Chainalysis report stated.
