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With data having surpassed gold in value, user credentials are a jackpot for data thieves. Millions of dollars worth of cryptocurrency have been stolen from wallets in 2022, and data breaches have been one of the biggest culprits. Here’s how to secure yourself against data breaches.
What Is a Data Breach?
Also known as a data spill, data leak, or information disclosure, a data breach is when your private information is intentionally or unintentionally leaked by a company you entrusted it with.
Once a data breach occurs, there is no way to control the spread of your data. A large proportion of stolen data, including usernames, passwords, credit card details, and Social Security numbers are sold on the dark web for less than five dollars.
How Do Data Breaches Happen?
Data breaches can be caused by an outsider or an employee within the company. An employee might mistakenly email system credentials to a criminal posing as the CEO. Or a cybercriminal might breach the IT infrastructure of the company with ransomware, an SQL injection, or a brute-force attack. A brute-force attack tries millions of passwords per second against your password until one works, so if you use a weak password for your cryptocurrency wallet, a brute-force attack could crack your password in as little as three seconds.
Additionally, the lack of a central regulating authority means crypto-investors typically don’t have the same protections offered by traditional financial institutions like banks. That’s why it’s becoming increasingly important to take your online security into your own hands.
Examples of Data Breaches in 2022
Since January, hackers have stolen over $30 million worth of cryptocurrency from user wallets. Here are some recent statistics that show how serious cryptocurrency theft has become.
January 17, 2022: Hackers break into 500 user wallets on Crypto.com and steal $18 million in Bitcoin and $15 million in Ethereum.
Experts suggest that decentralized finance protocols (like those used to facilitate transactions on Ethereum cryptocurrency platforms) are uniquely vulnerable to hacking. DeFi programs are also public and use open-source code, which could let cybercriminals study the code for weak points.
March 29, 2022: $540 million in crypto assets was stolen from the Ronin cross-chain bridge.
The Ronin bridge is an Ethereum sidechain built for the online game Axie Infinity. Hackers managed to steal 173,600 ether (ETH) and 25.5 million USD Coin (USDC) after gaining access to private validator keys.
August 2, 2022: $190 million dollars’ worth of users’ cryptocurrencies were stolen from cryptocurrency firm Nomad.
What Can Be Done With Stolen Data?
Stolen data can be classified into personal information and corporate information:
- Personal information. This is the most sought-after data due to its sensitive nature. Personal information includes stolen credit card details, Social Security numbers, phone numbers, addresses, and passwords to accounts. The theft of any of these details could result in identity theft and severe financial damage. To reconcile the damage, you will have to change your passwords and freeze your bank accounts.
- Corporate information. Companies often suffer data breaches that leak sensitive information. Aside from the obvious damage that the loss of financial details can incur, losing private company information can cause irreversible harm to a company's reputation.
How to Prevent Data Breaches
The aftermath of a data breach is overwhelmingly difficult to remedy, making prevention the best line of defense. And since login credentials are the most targeted source of stolen data, using strong passwords is the best way to prevent your data from being stolen. A strong password should be at least 12 characters long, use both lower- and uppercase letters, and include a number.
Complex passwords are near impossible to remember, and sometimes we resort to using obvious ones to make life easier. A password manager can generate hard-to-crack passwords and remember them for you, so you never have to sacrifice your security.
The Importance of Strong Passwords in Crypto Wallets
With cybercrime gangs scrambling to guess the password to your crypto wallet, using a complex password is essential. And with malicious techniques like brute-force attacks and SQL injections, hackers are able to steal hundreds of crypto wallet passwords.
Unique passwords can also prevent the risk of third-party data breaches. If an email account suffers from a breach, it could compromise any other account that uses the same password. With a password manager, you can store, autosave, and autofill as many strong passwords as you need.
Password Managers – How to Use NordPass
The most important aspect of a password manager is security. We recommend NordPass for its incredible encryption methods and easy-to-use app. Created by world-renowned cybersecurity company Nord Security, NordPass uses zero-knowledge architecture that protects your passwords with xChaCha20 encryption. Neither outsiders nor the staff at NordPass can see your passwords. NordPass even includes a preventative measure for data breaches. It cleverly scans the web for potential data leaks and informs you if your information is involved in a data breach. To use NordPass download the app from the NordPass website.
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