How CryptCard Prevents Hacking
Reports of cryptocurrency platforms getting hacked are becoming far too regular. This is surprising since blockchain-based digital currency and decentralized applications (dapps) are often considered safe and secure. As a result, more people are hesitant to jump into the Web3 bandwagon due to infamous acronym – FUD (Fear, Uncertainty, Doubt). Although Web3 technology isn’t perfect, there is a solution.
What is causing blockchain hacks?
There are different types of attacks involving blockchain and cryptocurrencies. One is centered around the end-user who is convinced by an attacker to send crypto to their wallet, equivalent to today’s phishing tactics. The other Web3 hack requires a deep understanding of smart contracts.
Smart contract security has had an increasingly bad reputation over the last few years, with billions of dollars worth of crypto assets stolen in the first quarter of 2022 alone. Binance, the world’s largest cryptocurrency exchange, lost half a billion dollars after a hack on its network. It became the latest crypto company to experience targeted hack after Wormhole cross-chain bridge, and Axie Infinity Ronin bridge.
Most hacks exploit the smart contract software that sits inside the blockchain. This program runs on-chain as a collection of code and data. It automatically executes instruction when it meets some established conditions.
The program can automate the movement of cryptocurrency according to prescribed rules and conditions. For example, a smart contract could enable the transfer of funds to a requester if the requester was pre-approved by the fund’s owner.
Typically, smart contract hacks are caused by bugs or insecure programming practice in the contract that allows attackers to forge transactions and send money to their crypto wallets. Nonetheless, some less sophisticated hacks employ common tactics such as phishing.
Why are smart contracts vulnerable?
Smart contracts that power crypto exchanges attract cyber criminals because they could hold high-value crypto assets in high volume. Most risks to smart contracts stem from poor coding. Ethereum, the second largest network, has reported over 32,000 smart contracts vulnerable to hacking because of poor coding. Hackers are targeting new attack vectors on these vulnerabilities to strike.
Once attackers discover vulnerabilities in a smart contract, they find technical means to exploit them. It may take just one error to compromise the entire smart contract protocol. A single smart contract mistake can lead to the irreversible theft of millions of dollars.
How CryptCard prevents this hacking
With smart contracts vulnerable to hacking, a solution is to counter smart contract hacking by running wallet-to-wallet transactions. CryptCard relies on this simple peer-to-peer feature of Web3 to send digital tokens directly from the sender to the recipient without a smart contract. That’s why it’s considered difficult to hack because no smart contract manages the transactions.
Other companies are developing auditing services based on established computer science techniques known as verification. Smart contracts security audits can help developers identify and patch security issues before they can be exploited. The audit could cover errors, issues, and security vulnerabilities in the code and suggest improvements to fix them.
While we wait for Web3 technology to better itself, CryptCard shall continue to address current vulnerabilities by keeping things simple but yet secure – wallet to wallet.