If we look back in history, we notice that one of the reasons banks came into existence was to safeguard the savings of people. And banks have been quite effective overall. But we cannot deny that there have been several cases where banks were robbed or money stolen.
In the present era, we have witnessed the emergence of cryptocurrency, which is considered safer and hack-proof. However, in reality, cryptocurrencies too have been the target of hackers. In 2021 alone, around $4 billion worth of cryptocurrencies were stolen.
It makes us wonder if our investments in popular cryptocurrencies like Bitcoin are safe? Also, how hackers actually manage to steal something like cryptocurrency, which is protected by advanced security systems? To answer such questions, let’s take a look at some common methods hackers use to steal cryptocurrency.
Targeting crypto exchange platforms – A number of crypto exchanges have come up, where users buy and sell cryptocurrencies like Bitcoin. These exchanges store cryptocurrencies in large volumes. With the use of advanced software tools, hackers can target cryptocurrency wallets of exchanges as well as users. After gaining access to the cryptocurrency wallet, hackers can steal millions in a single attack.
Exploiting system vulnerabilities – Not all crypto exchange platforms are created equal. Some of these may have inherent vulnerabilities that might make them susceptible to security breach. Hackers are constantly looking to identify vulnerabilities in crypto exchange platforms and exploit them to steal cryptocurrencies.
Stealing private key – A private key is similar to a password that is used to access a digital wallet. Security risks increase when this private key is stored on a crypto exchange or cloud drives. Most people use this method, as it makes it easier to access their digital wallet. Once the private key is compromised, hackers can easily steal money from your crypto wallet.
Fake exchanges and crypto investment scams – These methods are used to target people who have money, but very little knowledge of cryptocurrencies. Such people may be lured with the promise of high returns. They may be asked to invest in fake cryptocurrencies that are not even legit.
How to protect your crypto investments?
There are multiple steps you can take to protect your investments in cryptocurrencies. For example, you need to choose legit cryptocurrencies such as Bitcoin. Next, you need to choose a reputable crypto exchange that has high security standards. Another thing you can do is keep the private key of your crypto wallet in offline mode. This may be a bit annoying, but can help protect your crypto investments.