Ethereum: Is Cryptocurrency Really Safe?

Cryptocurrency – it came, it saw, it conquered; and now it is facing a foreign invasion. Its defences were breached by hackers who managed to get away with 153,000 ethers, which are $32 million in current exchange rate. Parity Technologies faced this security hack in their multi-signature wallet software while normal wallets are safe as yet. Before this, CoinDash had to cancel their ICO after facing a $10 million hack. (Wilmoth, 2017)

Theft of Cryptocurrency

So the question arises: is Cryptocurrency that safe as it claimed in the first place? The answer is never going to be simple because anything that goes online, through Internet is vulnerable. The level of vulnerability can differ but to say that it is 100% safe from breach is a far-fetched claim. Vulnerability in Parity Wallet was found by the hackers somehow, and left an ugly mark on the security claims of Cryptocurrency. No matter how much they work to tie up loose ends in the security now, it cannot wash away the scar. The accounts in multi-sig contract are suggested to be removed to secure addresses. Normal Wallet hasn’t been hacked but now that the system has shown its vulnerability, one cannot afford to be off guard. After the breach, White hat group took the necessary measures to get the rest of the multi-sig accounts assets to safety as soon as possible. The company is going to create another multi-sig for the owners and place them there with much more secure features, of course. (Lilly, 2017)

And this is not the first instance. $53 million worth of Cryptocurrency was stolen last year from venture capital fund decentralized Autonomous Organization and $450 million of Bitcoins from Mt. Gox, a few years back. (Lilly, 2017) So there is a dire need to know how one can ensure safety of his investment in Cryptocurrency and what kinds of measures are to be taken to avoid such disasters.

Safety Measures when using Cryptocurrency

Here are some pointers which may help you in keeping your Cryptocurrency safe from being hacked or snatched.

• Never leave your assets in the place which has been hacked or shut down. That facility has already been compromised. You can’t afford to leave anything to chances.
• You should hold the key to the wallets in which you keep your assets. If your Cryptocurrency is placed on an exchange or an online wallet then safety of your assets is going to be in third party’s hands and you cannot ensure security of your assets yourself.
• Best solution for keeping your Cryptocurrency safe is using hardware wallet. This will make it harder for any outsider to get access to your assets as the only way to do that is through having access to the hardware where it is stored or an access to your private key.
• While trading when you store your currency in exchange, use 2 factor authentication (2FA) as it will add a layer of security barrier to your account, making it secure for trading.
• Make sure you send your assets to the correct address as the process is irreversible with Cryptocurrency. To be on safer side for large amount, send out a little and after being sure, send in the rest.(Sassal, 2017)

These are some of the measures that can be taken to safeguard your crypto-interests. Online anything is always vulnerable to theft by online hackers who are always on the lookout for loop holes in the system and will not hesitate to manipulate them.

Bibliography

Lilly, P. (2017, July 20). Hackers steal $34 million in second Ethereum cryptocurrency theft this week. Retrieved July 22, 2017, from PCGamer: http://www.pcgamer.com/hackers-steal-34-million-in-second-ethereum-cryptocurrency-theft-his-week/

Wilmoth, J. (2017, July 20). Hackers Seize $32 Million in Ethereum in Parity Wallet Breach. Retrieved July 22, 2017, from Cryptocoins news: https://www.cryptocoinsnews.com/hackers-seize-32-million-in-parity-wallet-breach/

Sassal. (2017, May). How to: Keeping Your Cryptocurrency Safe. Retrieved July 22, 2017, from Steemit beta: https://steemit.com/cryptocurrency/@sassal/how-to-keeping-your-cryptocurrency-safe