The cryptocurrency market is starting to remind me of the Wild West.
Anonymous, digitally “masked” hackers are stealing millions upon millions in crypto.
None of this should even be possible.
The first pillar of the crypto narrative hinges directly on its impenetrable security. Cryptos and the networks behind them are supposed to be unhackable.
But after numerous successful breaches costing coin owners millions, it’s time to get real.
No system is infallible. The sooner we all realize this the better we can safely manage this thriving new approach to money.
But there’s some good to take away from the recent madness.
More on that in just a bit…
Tens of Millions of Ethereum Frozen or Stolen
This July someone hacked into ethereum’s digital network and stole $30 million worth of the coin.
Then just last week, ethereum took another hit when an estimated $100 million in coins was frozen and rendered inaccessible to owners.
Both attacks stemmed from vulnerabilities in what is known as a digital wallet. Much like it sounds, these “wallets” are digital stores for crypto where you can house and conduct transactions with your coins.
It’s one of the many aspects of blockchain that hackers can exploit. But the danger doesn’t stop there.
Bitcoin is just as vulnerable. According to a report by Bleeping Computer, new bitcoin malware attacks have already stolen over $150,000 worth of the high-value coin.
Kaspersky Lab was the first to identify the attack, called CryptoShuffler. This malware exploits a surprising vulnerability centered around your computer’s copy-and-paste function.
CryptoShuffler code monitors your computer’s clipboard activity during bitcoin transactions. During bitcoin transactions, users must copy and paste a recipient’s wallet ID into destination fields to validate sender and recipient.
The malware intercepts the copied wallet ID and replaces it with one that sends money directly to the attackers instead. If a user doesn’t carefully check the intended recipient wallet address against the one he or she pasted, fraudsters get the windfall.
Right now hackers are cleaning up.
Big Payoff in the Wake of a Crisis
The good news is, many companies in the cybersecurity space are aware of the problem and are working on solutions as we speak.
Bitcoin is worth over $7,000 a coin as I write this. Ethereum is over $300. Total market cap for all cryptocoins totals an astounding $200 billion.
There’s too much money involved to turn back now.
Instead of glossing over the problem, as many crypto experts seem to be, the most prudent approach is to tackle this new threat head on.
I expect a number of companies to initiate massive efforts to develop programs that can combat exploitation of digital currency and blockchain networks.
Believe me when I say this: A massive effort will be needed.
That’s why big cybersecurity companies like IBM, Palo Alto Networks, CyberArk and other leading security firms are at the forefront. They have the necessary capital and the best resources to offer real solutions.
As the executive cybersecurity adviser for IBM puts it:
It is just a matter of time until blockchain-based applications gain mainstream adoption and touch every aspect of our lives. Whatever the case, no level of automation or investment in technology can guarantee security. Proactive, risk-based cybersecurity should not be an afterthought but a prerequisite. After all, it takes just one weak link to break the blockchain.
Companies addressing weaknesses in crypto networks will surely see a big bump in value over the coming months.
It’s a space we’ll watch closely with great anticipation.
You should too.