Cryptocurrencies were created in hopes that they would ensure stability, as well as security and safety for their users. Legendary Satoshi Nakamoto – whoever that might be – promised that blockchain, with its comprehensive security firewalls, would be virtually uncrackable for any modern hacker.
Yet here we are, with cyber-crime on cryptocurrencies rising every single year and affecting its users gravely. Just one piece of information, that the number of malicious crypto mining software has increased by almost 95% from 2017 to 2018 is sufficient to prove this point and make us doubt the ultimate resilience of blockchain against hackers.
In South Africa, the crypto-attacks have increased exponentially, having exhausted the conventional mining devices and penetrating the smartphone industry. As experts from Kaspersky Lab claim, crypto-related attacks on smartphones are seriously increasing in this African country.
The promise of an ideal platform
When Satoshi Nakamoto came up with an idea to create a peer-to-peer technology where every process would be governed by the users, it was promised that blockchain would do away with some of the biggest issues associated with conventional ledger systems, predominantly in the financial world.
Some of the biggest issues were the lack of security of financial accounts, the compliance to the governmental monetary policies, and the non-existent anonymity for transactions. When it comes to security, blockchain was supposed to be this well-protected system that would update its security protocols every time a new transaction was made.
As for the monetary policies and other political measures, blockchain was a completely decentralized entity that was only governed by its users. This way, only the market forces of supply and demand would dictate the actual price of cryptocurrencies.
And lastly, the blockchain platform guaranteed the anonymity of transactions. This was made possible by the cryptographic mechanism used on the platform, which turned users into anonymous entities whose identity was covered and only the vague details about their transactions were visible.
Not very ideal in real life
So, on paper, blockchain looked pretty ideal for many users. However, as the technology became more and more popular and cryptocurrencies hit the market, many cases of crypto-attacks began to emerge on the surface.
One example of the massive crypto-attacks has occurred in South Africa, where many users and businesses use cryptocurrencies. A great example of this trend is a South African bitcoin casino which uses cryptocurrencies for its deposits, as well as withdrawals and the actual gaming process.
But all is not sunshine and rainbows there. In fact, lots of smartphone users are becoming easy targets for crypto-hackers. According to the Kaspersky Lab Africa managing director of cybersecurity experts, Riaan Badenhorst, cyber-crime targeting South African smartphone users is on the rise in the country.
As our readers may already know, cryptocurrencies are created through a process called mining. Mining uses a ridiculous amount of computing power to solve complicated riddles and generate new tokens of various cryptocurrencies, be it Bitcoin, Litecoin, or anything else.
Targeting South Africans’ smartphones
According to Badenhorst, crypto-hackers target exactly that feature and use targets’ smartphones to mine new tokens. This happens through a malware sent to people via various methods, be it email or social media. And when users open the file, it gives hackers complete access to the smartphone’s computing capabilities.
He then goes on by explaining what happens to the infected devices. If the malware penetrates the device, it usually gets very slow, starts to overheat, drains a lot of battery, and uses lots of data. In general, users can pretty easily notice if their smartphone has the same symptoms, making it easier to reveal the actual malware.
And if they suspect something similar is happening to their smartphones, Badenhorst suggests them to upgrade the software right away in order to update the security firewall. And if the update isn’t available at the point, they can factory reset the device, which will delete all data stored in it but will effectively remove the malware.
On top of that, Badenhorst makes it very clear that downloading untrusted apps from unknown sources and websites is the number one enemy for the users’ security. That’s why they should refrain from this practice in any way possible.
Crypto-attacks through phishing
Another method of stealing crypto users’ funds and data is called Phishing. Phishing is basically a cunning mechanism that tricks users into believing that they’re entering their credentials into a legitimate platform, while in reality, they’re sending those credentials to the hackers.
Phishing has become more and more sophisticated over the years. Right now, this method uses website clones that are virtually impossible to discern from reality. For example, hackers can create an exact copy of the Bitcoin exchange website and send it to the Bitcoin owners.
If and when a user enters their details into the system, hackers get hold of the credentials in real-time. But one thing to mention here is that it’s not entirely impossible to spot Phishing websites because they aren’t exactly the same copies of the original websites. The fake ones always have at least one letter or number, or even a symbol different from the original one. For instance, instead of facebook.com, it’ll be facbeook.com or something along those lines. Therefore, there is hope to save yourself from a crypto-attack.
Besides, some analysts claim that law enforcement agencies in South Africa are working much more vigorously and proactively to track crypto transactions and reveal illicit activities. According to Marius Reitz, manager for the crypto-walled Luno, since Bitcoin transactions are stored on the blockchain, they’re visible for everyone. Therefore, law enforcement departments can potentially reveal hackers and present them in front of the law.
Shattering crypto myths
So, the bottom line of all this is that cryptocurrencies aren’t that secure and safe they have been advertised over the years. Sure, blockchain and its byproducts are more effective on many occasions than their conventional counterparts like fiat money and others, however, this certainly doesn’t mean that they’re invincible and beyond hackers’ reach.
The case of South Africa proves exactly that point. Crypto-hackers have been increasingly targeting South African smartphone users and using their computing power to mine new crypto tokens. The after-effect of this attack was slowed down and overheating phones, increased battery and data consumption, and many more.
Analysts suggest that whenever they notice these symptoms on their phones, they immediately update the software or reset the phone to the factory settings. And, more importantly, that they refrain from untrusted app sources and providers – they’re the ones that propagate malware to the smartphones.