More people now engage in cryptocurrency investments. With this, hackers continue to find more ways to penetrate crypto wallets. Whether through phishing, fake hardware, verification exploitation, malware, and more. Their determination to hack is now getting wider.
In light of this problem, you should also brace yourselves with enough knowledge. In order to avoid falling into their traps, you need to know how to avoid them.
In this article, know more on how you can protect your cryptocurrency wallet from backdoor attacks. Read on!
What Are Crypto Wallets?
A crypto wallet can either be a software product or a hardware device or a paper wallet. A person who owns a crypto wallet uses it to store his private key for his crypto accounts. These keys are a composition of a random number and letters securing accounts.
The purpose of public keys is to make transactions easier. Public key is like having a home address so you can receive mail. Private key is like a key to your mailbox so you can access it. It allows you to receive crypto transactions when you buy bitcoin or other cryptocurrency. These are the keys that users often give to be able to send your crypto somewhere else or exchange it for another crypto.
What Are Some Types of Crypto Wallets?
There are different types of a crypto wallet. Below are the basic types to help you decide which is best for you.
Noncustodial vs. custodial
Non-custodial wallets are those that do not have a third party to help you log in. The user is the sole keeper of the keys to access his crypto assets. If users forget their passwords, there is no option like “Forgot Password?” to recover the account back. This type of wallet is considered the most secure option or the top crypto wallet. Even with its nature, security breaches are less worrisome in this type. You just have to be responsible to look after your assets by yourself.
Contrary to the previous type, custodial wallets have a third party helping users to log in to their crypto accounts. If users also forget their passwords, there is an option to prompt the user back in. This type of wallet is often web-based. Cryptocurrency wallets are targets of hacking so security breach is a threat of this type. Even with this threat, users also prefer it as it is easy to use.
Hardware vs. software
A user's private key is stored in a hardware device using hardware wallets. Users may take this wallet with them wherever they go since it fits in the palm of their hand. Most models use Bluetooth, usb cable or they can be airgapped using a camera with QR codes. Even though you can take it with you wherever you go, it's still better to keep it in a safe.
This wallet functions similarly to a non-custodial wallet, in which the user is completely responsible for the device and its private key and PIN. Users' crypto accounts are locked if they lose them, and there is no third party to aid them. Hardware wallets provide an additional layer of security because even if your computer gets hacked, the hacker would need to be physically present to press a button on the device in order to withdraw crypto.
Software wallets, on the other hand, allow users to store their digital currency securely online. These wallets are available for download as mobile or desktop applications. Users will have easier access to transactions. The same holds true for custodial wallets.
When users lose their phone or forget their password, the software maker can help them access their accounts. Software wallets are less secure than hardware wallets. The security of software wallets is inferior to that of hardware wallets. In order to withdraw crypto from hardware wallets, a hacker must physically press a button on the device.
What Is a Backdoor? How Does It Work?
A backdoor is literally like an exit door in homes. This backdoor in the crypto world allows anyone to access devices without permission. Software and hardware developers can install these. However, hackers also install it to access such devices.
Backdoor gives cybercriminals unauthorized access to the user’s device or computer. This will enable them to install malware, steal money/data, or sabotage networks. These backdoors are often hidden in the design of the program.
Backdoor attacks happen when hackers access your device through a weak point. They find a compromised application in your device. They will use it to exploit their data by installing tools to your device. Hackers then deceive users into thinking that it is a legitimate application.
When the device is already compromised, they use the backdoor in stealing cryptocurrency, and your data, and monitor your activity. They will then use this to crash your device through viruses and will use your data to their benefit.
Examples of Backdoor Attacks
Back door attacks are detrimental to users’ devices and data. Below are a few examples of such attacks:
DoublePulsar crypto jacked
The National Security Agency in the United States created the DoublePulsar backdoor malware (NSA). This was known to be used to monitor Windows PCs in order to install cryptojackers on them, according to security experts. They take money from the computers they break into and use it to mine Bitcoin.
Dual_EC (cryptographic backdoor)
This encrypts the user's information using a specific formula. It also has a backdoor that high-level users can decrypt. Edward Snowden proved in 2013 that the NSA possesses the private keys. This means that they are able to decrypt any communications with Dual_EC. Dual EC is used by a number of firms, including Microsoft and Blackberry.
PoisonTap
Samy Kamkar developed PoisonTap. PoisonTap can enter a user's logged-in websites. This includes websites that use two-factor authentication. Only when the backdoor software is placed directly into the victim's USB port can it be hacked. This virus is extremely harmful and requires physical access.
Best Ways to Protect Your Crypto Wallets from Back Door Attacks
Indeed, the increasing threat of back door hacking is alarming. Backdoors are hard to detect and users need to learn how to prevent them. Let’s now further discuss the best ways to keep your crypto safe.
Use an Antivirus
Antivirus software is everywhere. Users must ensure that they use advanced antivirus software to detect alarming malware. Such malware includes trojans, cryptohackers, spyware, and rootkits. Using an antivirus will help assure you of backdoor viruses. This software will detect them before it infects your device.
Download with Care
Download any software with caution. Watch out for malicious software. Check to see if there are any other files being downloaded in addition to the one you want. Always make sure to also download from reliable sources to avoid viruses.
Use a Firewall
Anti-backdoor firewalls are also necessary for protection. A firewall prevents a hacker from using your device without your permission. It also aids in the identification of backdoor communications, even when they compromise the user’s malware detection.
Use a Password Manager
It is also important to use a password manager to generate and store information. This will help you in logging in to your accounts automatically. They securely encrypt the information you store and they lock them behind a master password.
Stay on Top of Security Updates/Patches
Windows, macOS, or Android update their software often. One of the best ways to protect your crypto wallets is to install updates as frequently as possible. Hackers mostly recycle their malware. The patches that developers make will help fix the vulnerabilities of your software when you update it.
It’s best to install when there is an update available. You can simply navigate it in your settings to easily update them.
Use a Non-Custodial Wallet
If you have a lot of cryptocurrencies, you should use non-custodial wallets. You also have control over your keys with non-custodial wallets.
This wallet provides additional protection, but it also comes with a higher level of accountability. Because you can lose your crypto assets if you lose the keys, it's critical to keep a backup. Some people prefer to write down their passwords. A hardware wallet may be a better alternative as well.
Hardware wallets offer additional security against cyber-attacks. Some have numerous keys and a function for further security. People having an interest in the holdings can be given these keys by the user.
Avoid Unregulated Exchanges
It is best for users to engage in regulated cryptocurrency exchanges. Security measures in this exchange have high standards. The management is also transparent. Therefore, you can be more assured of your transactions.
Use App-Based Two-Factor Authentication
There are many applications that use two-factor authentication. Users can use apps to protect their accounts. SMS verification is not the only option to protect your accounts. You can opt for more options as SMS can be hacked easily.
Avoid Reusing Email and Crypto Account Passwords
When signing up on accounts, some software suggests using a different password from your other accounts. Using different account passwords is also important to decrease the hacking likelihood of your other accounts.
Users must use unique passwords that are hard to guess and memorize. They can then store them in a password manager service to keep them safer. These managers also help users in generating unique passwords.
Maintain Multiple Wallets
“Do not put all your eggs in one basket”. This is a popular quote to advise any investor. It is always better to spread your cryptocurrencies to multiple wallets. This is so as not to hold large amounts of cryptocurrencies in one wallet.
This will help users in risk management. If one of their crypto wallets or keys is lost, they can still have access to their other wallets. This will help them to manage the risk that attackers pose.
Conclusion
More people are now using crypto-wallets. Therefore, it’s best for them to really know how to protect their cryptocurrency wallet and wallet addresses, have a secure element chip, avoid such an attack, and more. Users should learn more about what they engage in.
However, they should not only learn about the best ways to invest, and the best wallets to use. They should also expose themselves to learning the best ways to protect their investment and their crypto wallets. Especially now that attackers are optimizing their skills to penetrate the holders’ network. However, there are also many ways you can protect your crypto wallets. You just have to be more vigilant and knowledgeable about them.
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