The Rising Problem of Crypto Theft, and How to Protect Yourself

Part of the appeal of cryptocurrency is that it exists “outside” of the system.

Using complex cryptography and decentralized ledgers, a blockchain can operate independently from the world’s most powerful countries, corporations, and banking institutions.

While this detachment from authority is extremely powerful, existing almost exclusively in the digital realm does have its drawbacks.

Preventing Crypto Theft

Today’s infographic from CryptoGo shows that as cryptocurrencies rise in prominence, so does its appeal to hackers, criminals, and other bad actors.

With millions of dollars being stolen via crypto theft, investors and other dabblers in cryptocurrency must take precautions to protect their assets for the long haul.

Crypto theft comes in many different forms, and at least $225 million of cryptocurrency has been stolen as of mid-2017.

There are various forms of crypto theft that have made this possible, including brute forcing, phishing, phone-porting, mining malware, and Ponzi schemes.

Strategies Used by Crypto Thieves

Here are the most prominent forms of crypto theft:

Brute Forcing
This is the form of hacking that most are familiar with. It involves automated software that simply tries different passwords until one works.

Phone-Porting
Using your phone number and a little “social engineering”, a hacker can convince a customer service rep that they are actually you. This allows them to reset your password and access your funds.

Phishing
In this case, a hacker will send you suspicious links through email or social media messages. By clicking on one of those links, malware is installed.

Ponzi Schemes
Multi-level marketing schemes that provide signing bonuses. These eventually collapse when prices change or signups stop. Once over, the thieves takes the money and run.

Mining Malware
Hackers hijack a computer’s power to mine cryptocurrency remotely.

Protecting Yourself

Crypto theft can be prevented by taking appropriate precautionary measures.

These include using encrypted backups to hold private keys and other data, using proper anti-virus software for crypto, and opting for multi-factor authentication.

Further, other general measures can also be taken to protect assets, such as holding only small amounts of cryptocurrency in hot wallets, using safety deposit boxes to store USB and private paper keys, turning off SMS authentication and email recovery options, and diversifying holdings through various exchanges.