Can Crypto Wallets Be Hacked?

There are frequent reports on discussion boards and social networks about the hacking of cryptocurrency wallets. Billions of dollars have been lost because of hackers.

Hacks can be divided into three categories:

•   The user's own fault. Often Internet users use hacked versions of operating systems, free antivirus programs, and follow suspicious links. As a result, keyloggers and other malware may be installed on their devices. Thus, attackers do not need to hack anything. They get a login, a password, and a secret phrase, so they can easily log in to their account and transfer funds to their addresses.
•   Hacking of the service. In 2017, the developers of the Parity wallet reported that attackers gained access to users' online wallets and withdrew 150 thousand ETH. There are a huge number of similar reports in the media.
•   Fraud on the part of service owners. Users who are willing to entrust their digital money can become the target of fraud by individuals and companies offering fake services. Creating a website using a template script, hiring several online assistants, and offering storage services is not such a complicated task. It can be implemented by an average programmer. Advertising on Facebook and other social networks can attract many users, especially if such a company offers some extras.

Have crypto currency hard wallets been hacked? It's a wrong question! It is better to deal with how many crypto wallets have been hacked. A huge number!

For example, the LBC company has been brute-forcing huge amounts of online wallets, which allowed it to access 54 private keys in two years. Hacker Kevin David Mitnick professionally tests security systems. In one experiment, he managed to access 56 thousand Bitcoin wallets with a total balance of 2.5 BTC in just one week. That's about $100,000 at current exchange rates. Today both individual hackers and entire companies are constantly hacking and cracking wallet passwords. Therefore, it is impossible to say that your cryptocurrency savings are secure.

The total number of hacked cryptocurrency wallets is in the millions. No one knows the exact value, because hackers usually do not report successful hacks. Their goal is to hack as many as possible, even with a small amount of money. Therefore, losses can be unnoticeable for a long time, especially if you have dozens or hundreds of addresses and several wallets at your disposal.

What’s the Point of a Crypto Wallet?

The purpose of a cryptocurrency wallet is to provide safe and secure storage of digital money and easy access to use it. Cryptocurrency wallets come in several types.

Online wallets

Online wallets, such as "Blockchain, are very easy to use. They are accessible from anywhere on the planet on any device. You can access your wallet from a personal computer, laptop, or smartphone. If you happen to lose your device, the money will still be in your wallet. It is enough to remember the login, password and secret phrase.

It should be noted, though, that any online wallet is a third-party service. In most cases, you only have your login, password, secret phrase and nothing else. Usually such services do not ask for confirmation of personal information. If access is lost, there is no way you can restore it.  A huge disadvantage of online wallets is hacker attacks. Cybercriminals hack into virtual wallets, and as a result, users lose their money. An online service can simply shut down. Even large companies, such as "Blockchain, experience problems serving their customers. This causes panic among users.

An online wallet, in fact, is very convenient. You can convert a crypto wallet address into a QR code, keeping a large number of digital currencies in one place. But you do not influence security and have to just hope that nothing happens to your funds.

Offline Wallet

An offline wallet is a piece of software that is installed on the user's device. This is not very convenient, because it requires a large amount of free space on the hard drive. But still, the main danger is a failure of the device, loss, and theft. You can buy an additional laptop to use your wallet, but there is no guarantee that it will not be stolen, or that it simply will not fail. There are a lot of cases like this. In particular, the story of one British man, who in 2013 threw away a hard drive with a wallet containing 7.5 thousand bitcoins.

It may surprise you, but SSDs and HDDs fail very often, far more often than hackers hack into cryptocurrency wallets. Install the HDD Health or SSD Life pieces of software, and you'll see an estimated time when your drive will fail. That's usually 10 to 15 years. Even if you use it once a year, there will be natural wear and tear due to environmental influences such as humidity and dust. Therefore, in terms of security, it is more reliable to entrust the storage to a third-party company than to do everything with your own hands.

Hardware wallets

A hardware wallet is a device designed to store cryptocurrency. Trezor Model T, Ledger Nano S, and others are considered more secure than using a personal computer or laptop. The risk of theft is minimal because such devices do not have a permanent connection to the Internet. But while hardware wallets do provide high protection of funds, they themselves can fail or be lost. A hardware wallet is like a gold bar. It is a physical object that should be stored securely somewhere.

Many users believe that buying a hardware crypto wallet will allow them not to worry about storage issues for years to come. But, for example, the manufacturer's warranty on the Tangem Card device is only 12 months. How can we talk about long-term storage in this case? If something goes wrong, you're on your own.

When there are problems with your exchange, you can always contact the support team, confirm your identity, and regain access to your funds.