With its technological advancements, such as Web3, blockchain, and cryptocurrency, the digital world has become a breeding ground for new forms of cyberattacks. Even though people can take control of their finances, the ease with which malicious actors can gain access to and steal the digital currency stored online is terrifying.
Following the December 2021 Badger DAO cyberattack on the blockchain, where the attacker managed to steal $121 million from 200 accounts, Microsoft has warned that ice phishing might be the upcoming trend among the adversaries. It can put your cryptocurrency at considerable risk. Hence, it is essential to be adequately aware of such threats and be cautious to protect your crypto wallet information’s confidentiality, integrity, and availability.
Things You Should Know About Web3
While Web1 revolved around commercial web pages created by established organizations, Web2 tried to break out of it and give more power and authority to the masses by allowing them to develop and publish their content online. Web3 is yet another attempt at breaking free from centralized control bodies, such as banks or other organizations, where you alone have control over your data. With Web3, an individual becomes the one who handles their finances, starting from buying to storing to selling. It is usually done using blockchains, non-custodial wallets, and smart contracts.
Blockchain is a type of immutable public database. It means that the information stored on the blockchain is publicly available to all users, yet no one can alter it. The immutability of a blockchain ensures that no one can erase the kind of information stored on the blockchain either. Although blockchains can store all data types, their most common usage is cryptocurrency ledgers. You can keep the information regarding your cryptocurrency transactions on the database in the form of a block. Every transaction information is stored on a separate block, and the blocks are linked together.
Web3 allows you to create your account on the blockchain to carry out digital transactions. Your blockchain account, which acts as an account ledger much like your bank ledger, allows you to make transactions and view balance easily. Your crypto accounts are also connected to your crypto wallets. Such wallets usually come with a cryptographic key. This key acts as a signature used to carry out transactions. If an attacker gains access to the key, they will transfer cryptocurrency from your account.
Digital transactions, such as sending or receiving cryptocurrencies on the blockchain involve smart contracts. Though smart contracts strive to preserve the confidentiality, integrity, and availability of your digital assets and transactions, they also have their vulnerabilities.
Ice Phishing Blockchain Attack
The ice phishing blockchain attack that occurred in 2021 December on the Badger DAO network could not be blocked, and the attacker managed to steal $121 million worth of cryptocurrency from 200 accounts. Unlike usual phishing methods, the ice phishing cyberattack utilizes a sophisticated mechanism. Your blockchain account that comes with a non-custodial wallet has a cryptographic key attached to it. This key acts as your signature, granting permission to carry out transactions from your account. Once the attacker gains access to this key, they could steal your cryptocurrency from you.
With increased cybersecurity threats and complete decentralization, cyberattacks have become a real threat for crypto account holders who store their assets online. Blockchain, however, is considered one of the safest options available. However, as Andres Gil, Cyber Risk Lead at LATCO, Deloitte, states, it is not economically practical to protect everything from cyberattacks. Although there are efforts to make blockchain safer from cyberattacks, you cannot eliminate undesirable incidents. As such, it is up to you to be adequately cautious to protect yourself from cyber-attacks using methods such as the ones listed below.
- The best method to safeguard your crypto balance and account is to ensure that your wallet’s cryptographic key is not shared with anyone.
- You must also refrain from falling prey to emails claiming that your account is at risk and request you to click on some link to access it.
- Learning how to stop phishing emails is essential not to fall victim to cyberattacks. Some links might lead you to websites that can download suspicious files. They can trace the transactions from your local device and might manage to copy your cryptographic key.
- Using anti-ransomware solutions can also prevent malicious downloads, and your local device is kept safe.
- Always be sure what links you access, and never click on suspicious pop-ups.
Remember the Pitfalls of Web3
While the Web3 world offers the end-users freedom, it has its list of vulnerabilities.
- Lack of governing laws: With the freedom to utilize the web with complete control, the lack of rules to handle any misuse becomes apparent. Since there is no centralized system to control the users’ activities, it becomes difficult to trace even the attackers.
- Security Threats: Any data stored online is vulnerable to security threats. Your blockchain account is no different. Your crypto wallet comes with a cryptographic key used as a signature to carry out transactions. If the key is stolen, malicious actors can empty the assets in your account in no time. To keep a safe distance from attacks such as ice phishing, you must learn more about anti-phishing solutions, including protection against phishing emails, malware, ransomware, and suspicious links and websites.
- Decentralization: Web3 is entirely decentralized, which means that a million minds are operating and changing the system every moment. The way Web3 and its security system work will also keep changing. It will have risks, and the lack of centralized control will cause more security problems.
Web3 facilitates access and maintenance of your cryptocurrency accounts and data despite the disadvantages. And if you can protect the data from cyberattacks such as the recent ice phishing attack on blockchain accounts, you will be able to enjoy the freedom that Web3 and blockchain offers.
Although blockchain helps you break away from centralized institutions such as traditional banks, it can also put all your cryptocurrency at enormous risks, like ice phishing attacks. And cyber attackers are always on the lookout to expose you to such risks. Therefore, you must learn about basic cyber hygiene to ensure safety from such threats. While blockchain and Web3 provide you with complete freedom to control your crypto balance as you want, you must be ready to handle the responsibilities that come with it to enjoy the service safely.