Bitcoin wallet and cryptocurrency hacking

Smart contracts

Any blockchain-based application is a program. Smart contracts created on Ethereum are not without problems and vulnerabilities. The more complex the program code, the more bugs and the higher the probability of stealing information, money. In particular, in 2020, the decentralized crypto exchange Uniswap almost lost the assets deposited by users. The reason was an error in one of the smart contracts. This inaccuracy was noticed in time by one of the users and alerted the project administration.

Attackers prefer to check complex code. They are looking for where they can find bugs to hack the network. In order not to make their task easier, developers from the bitcoin community created a programming language with a simplified syntax – Bitcoin Script. This increases the security of the applications.

Hacking a bitcoin wallet

There are software or hardware tools for storing cryptocurrency. In addition, there are exchange wallets that offer different platforms for working with digital assets. A bitcoin wallet can be hacked in different ways, depending on its features.

A coin vault is a program. Therefore, when they say “hack a wallet”, it should be understood as “find a vulnerability in the code”. User funds are stored in the blockchain in the form of records. Wallets provide the owner with access to his coins as well as the ability to make transactions.

Security keys and a mnemonic phrase protect the information. They are used in any type of wallet. There are 2 types of keys:

• Public – needed to transfer cryptocurrency, available to everyone, is a hashed version of the wallet address.
• Private or private – secret information that provides encryption. Without this key, it is impossible to transfer or receive coins. It is kept secret.

Attackers seek access to the private key to steal the user’s cryptocurrency. It is unrealistic to decrypt, i.e. hack into a virtually public key. Computers with existing computing power are unable to do so.

Access to keys

It is recommended to keep private information safe, follow the rules of behavior in the network. Access to private keys should be limited. There are different ways to hack cryptocurrency. You should not simplify the life of fraudsters.

It is possible to pick up the public key from the reverse, knowing the private key. In practice, it looks like this:

1. For an example, a simple password QWERTYUI will be used.
2. Using any online SHA-256 calculator, a hash is generated for the selected value.

   The

   generates
   .
3. The obtained value – 13dda2ceb38eb24f36f2a36678a6d62e7206fe7d0a154075023ab1e51befdba1 – is the private key.
4. Special sites are used to generate the address. Bitaddress.org is used as an example.

   

   There are services for creating bitcoin addresses
5. In the Enter Private Key field of the Wallet Details tab you need to enter the generated private key and click View Details.
6. As a result, you will get 2 bitcoin addresses – full and compressed.

   

   You need to go to the Wallet Details tab
7. Next, you can use any of the resources to verify the key. For example, Blockchain.com.

   

   There were no transactions at this address

The public key does not authorize to send coins and tokens from the wallet. Therefore, its calculation will not help attackers to commit theft. But if the user does not understand how bitcoin addresses and encryption keys are organized, he can accidentally send the secret code himself, confusing it with the address. It is possible when a newcomer exposes a screenshot of the application, which shows confidential information. After that, anyone who wishes to do so will be able to take possession of his koins.

Hacking programs

The example shows clearly how you can create a private key and find the address corresponding to it. However, in practice, no one does this. The process is automated, attackers use software. The burglar application simply searches through possible keys, finds addresses for them.

The second option of using programs to steal bitcoins is to search for weaknesses in the code. The practicality of such applications is questionable.

Examples of software whose advertisements indicate the possibility of stealing bitcoins:

Ways to steal BTC

Attackers use dozens of other options to get to the coins of gullible and frivolous users. If you know all the ways, understand the principle of their operation, you can protect your bitcoins from theft.

Phishing

Fake services provide fraudsters with confidential information. They collect such data:

• Login and password from the account (on a crypto exchange, exchange service).
• Passport data.
• Passwords from cryptocurrency wallet, bank cards.
• E-mail data.

Fake websites are used to steal confidential information. Fakes are designed in the style of original cryptocurrency exchanges, exchange services. When registering on them, the user enters his login and password, provides other data. Then the fraudsters take all the coins from his cryptocurrency wallet.

To avoid falling into a trap, you need to carefully study the address bar, the name of the resource. Fraudsters use domain names that differ from the original one letter, another element. At the same time, phishing services are in the color scheme of real platforms, use similar logos.

Device hacking

Desktop, mobile, hardware and exchange wallets are used to store cryptocurrency. All devices and resources contain a software part that can be hacked. When trying to get to cryptocurrency, fraudsters try to get private access keys. They can be stored on users’ computers or other devices. Attackers use different methods for unauthorized access. Almost all PCs, smartphones and tablets are vulnerable because they have constant access to the Internet. It is recommended to store private keys on paper, separate flash drives.

Keyloggers

This is another option for collecting personal information. Keyboard spies refer to malicious software. Once on the user’s computer, they are installed and work without his knowledge. The main task of a keylogger is to collect and transmit passwords, logins. Such spies are used to collect private keys, mnemonic phrases, and data about cryptocurrency wallets.

The principle of keylogger operation is simple: it records what the user types on the keyboard. That is, it records absolutely all keystrokes. The collected information can be transmitted to the creator of the program. However, such services are also used to solve useful tasks. For example, to call functions using hotkeys or to switch the layout.

Trojans

There are many variants of using programs for criminal purposes. There are Trojan applications that masquerade as legitimate software. They are used to steal passwords, bank card information, and other illegal activities. Trojans can also use PC resources for cryptocurrency mining or illegal trading. Malware is distributed via email attachments, dubious websites, and transferred on flash drives from other infected PCs.

To avoid getting a trojan or keylogger on your computer, you should follow the minimum requirements of network hygiene:

• Do not open questionable e-mails in e-mail.
• Do not install unknown applications on your PC.
• Do not download questionable files.
• Use anti-virus programs.

Fake wallets

Hackers use any means to get information or coins. If hacking a Bitcoin wallet fails, fraudsters create their own vault, distribute it through marketplaces and other services. Users download software, install it – and hackers gain access to cryptocurrency.

Fake wallets masquerade as original wallets. They have similar logos, color schemes. Google Play and App Store app stores allow such programs on their platforms. To avoid getting into an unpleasant situation, it is recommended to download cryptocurrency applications directly from the developers’ websites.

Browser extensions

Programs for surfing the Internet are growing up with additional add-ons. Browser extensions make the user’s work easier. However, there are malicious add-ons that allow scammers to steal cryptocurrency. The extension changes the address of the wallet, steals personal data, tracks the information needed by criminals. You need to check reviews, recommendations before you install the program and give it access to the operation of the browser.

Fake ads

The attitude to cryptocurrency on the part of social media developers has not always been positive. In 2018, many services (Facebook, Twitter and others) did not allow to publish information about coins, give advertising.

Attackers take advantage of such a ban by creating fake ads about cryptocurrency exchange. They attract people with low commissions, favorable purchase rate. As a result, users go to a fraudulent resource and lose their savings.

Bypassing two-factor authentication

Many services offer additional protection of data or funds. To do this, they use two-factor authentication, or 2FA. The essence of the method – the user confirms his identity 2 times. This allows you to increase the security of the resource. Smartphone, e-mail, other methods of identification are used.

In addition to entering a login and password on the site, the following variants of 2FA can be additionally used:

• Sending a code in an SMS message or a letter to an e-mail. It must be further specified on the site.
• Entering a combination of characters that is generated by a special authenticator program that is pre-installed on the device (smartphone, tablet).

Attackers can intercept SMS messages due to vulnerabilities in the data sending protocol. Hackers also infect the smartphone in advance with malicious software, clone mobile operator cards, and hack into user accounts on the website. Their goal is to gain control over all the methods of protection that the visitor applies. After that, hacking a BTC wallet is no longer relevant: fraudsters already have access to cryptocurrency.

Sending funds to scammers

Many services sell goods or services for coins. They send their customers a bitcoin wallet address. Scammers create copies of such services and stores. The user makes an advance payment, as a result, the money goes to the scammers. It is recommended to check the reputation and reliability of the store just before sending coins.

Summary

Hacking a bitcoin wallet is a difficult task. However, attackers find ways to steal other people’s coins. To do this, they use some human weaknesses:

• Laziness.
• Greed.
• Gullibility.

Also crooks apply software. Many of the criminals are experienced programmers whose abilities are aimed at bringing harm rather than benefit.

Attackers are in the hands of the uncertain attitude of the authorities of a number of countries to cryptocurrency. It is difficult to seek help from law enforcement agencies to complain about the theft of assets that are prohibited in that state or whose status is not legalized.

Security Tips

Cryptocurrency is as valuable as money, gold. Its safety depends on the owner, his desire to protect his property from the encroachments of fraudsters. Knowing the essence of the methods of hacking the wallet, you can protect yourself from this. Having understood the principles of the blockchain, it is possible to exclude the possibility of stealing bitcoins.

Hackers are constantly inventing new ways to deceive gullible people. The main thing is to check any information, use reliable sources, cryptocurrency forums, thematic sites.

Recommendations for the safety of digital assets:

• Use antiviruses.
• Install only verified software from developers’ websites
• Do not install unknown browser extensions.
• Check the address bar for correct spelling of the name and domain of the service.
• Click only on verified links.
• Use hardware (cold) wallets to store cryptocurrency.
• Do not send private keys, mnemonic phrases by e-mail, in messengers, do not store this information on your computer, in cloud services.
• Soberly evaluate profitable offers to earn money on cryptocurrency.

Frequently Asked Questions