The dangers of malware and how to protect your crypto

While blockchain technology is very safe, malware can still be used to target other areas in order to steal cryptocurrency from users

Malicious programs can spread quickly and cause enormous damage if not properly protected against.

While blockchain technology is very safe and there have been very few successful attacks against it in history, malware can still be used to target other areas in order to steal cryptocurrency from users.

Malware is becoming smarter and evolving every day, with some programs now able to replicate and control domains and track Bitcoin transactions.

Because of this, it’s important to know what different types of malicious programs and attacks exist and how you can effectively protect yourself.

How are users being attacked?

Some modern malware programs allow thieves to hack popular browsers such as Chrome, Opera, and Yandex to view users’ history, cookies, account names, and passwords.

One particular piece of malicious software uses a function that is designed for Electrum Bitcoin wallet servers and can access the history of the blockchain hash script using a hard-coded hash, allowing the thief to view the entire history of related transactions.

This gives them access to wallet addresses and keys so they can siphon crypto from the wallets of unsuspecting users.

Thanks to the decentralisation of cryptocurrency, the funds from these accounts can be transferred without intermediaries to anywhere in the world in just a few clicks.

All technology has weaknesses, and blockchain technology is no exception.

Types of blockchain malware attacks

Sibyl attack  If a single malicious actor can take over a huge number of nodes in the blockchain network, they can disrupt its operation by creating false transactions or manipulating the data of correct transactions during transfers.

Routing attack – Malicious actors can hack internet providers to intercept traffic between separate segments of the internet. This phenomenon can be used against Bitcoin or other cryptocurrencies as well.

With this type of attack, the hacker would hijack your transactions and insert themselves as an intermediary. After stealing your coins and transferring them away, they can remove the separation, and the shorter chain containing all the malicious transactions will be destroyed.

Direct denial of service (DDoS) – This type of attack involves a constant stream of fake requests which prevents the server from servicing requests from real users. The network or host therefore has no time to process real transactions.

While this type of attack is inconvenient, it’s impossible to steal information or create big security problems using this method due to the special architecture of Bitcoin. DDoS can however be used as an aid to malware as it gives the hacker more time to initiate software.

Common attack methods

Malicious actors will use malware to infect computers or mobile devices for various purposes, including obtaining personal data and passwords, stealing money, or blocking access to the device.

Dangerous programs designed to grant access to devices without the knowledge of the owners can be different. These include programs such as spyware, adware, trojans, ransomware, viruses, worms, rootkits, and programs aimed at taking control of your web browser.

Everything that you download from the internet to your device that does not have anti-malware tools can potentially be dangerous.

Here are some of the more common dangers to be aware of.

  • Spyware – This type of program collects information about the search history, habits, and preferences of the user and can be used to obtain sensitive data such as bank card information and potentially private keys.
  • Pop-ups – These are classic annoying pop-up messages that can be used to collect personal data, track your browsing history, and even intercept user-entered text.
  • Phishing – This involves the illicit use of mass emails often pretending to be well-known companies or banks that contain false links to trick users into clicking on them. Clicking on the links can infect your device with malware which can then steal your information or request ransoms.
  • Computer viruses – This is the part of the program code that is downloaded to your computer without permission. Clicking on a link or accessing a file will cause the virus to spread automatically.
  • Trojans – This is a very dangerous type of malware that masquerades as a program or application but is designed to steal confidential data and cause harm.
  • Computer worms – This self-replicating form of malware consumes large amounts of system memory and network bandwidth, causing servers and workstations to stop responding.
  • Rootkits – This malware can be hidden in third-party programs and used to remotely control your device.

How to protect yourself from malware

If you notice a device you own is responding slower than usual or you’re experiencing persistent pop-up messages, spam, or malfunctions, your device may be infected with malware.

There are two sure-fire ways to protect yourself from malicious software: use powerful anti-virus programs and do not download files attached to suspicious email messages.

If your crypto does get stolen, in 99% of cases, this is not a return operation. However, it is necessary to analyse why and how it happened.

Since each Bitcoin transaction is recorded on the blockchain – a distributed public registry – they can be tracked. Any user can download the entire history of Bitcoin transactions, which currently occupies about 160GB.

With this, you can track which exchange or what the stolen funds were spent on. Theft of cryptocurrency most often occurs due to the carelessness of owners, insufficient protection, and weaknesses in third-party services. Make sure to do your research and ensure all your security is up to date, and keep an eye out for any of the potential attacks and malware listed above to ensure you keep your funds safe.

Learn more about how to keep your cryptocurrency safe with our guide here.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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