Here Are Four Lessons We Can Take Away from Solana’s Public Humiliation at The Hands of The Slope Hackers
We now know that the attack that affected thousands of users (over 8,000 at the time of writing) on the cryptocurrency platform Solana was not due to a widespread system malfunction. The cryptocurrency wallet service provider Slope is likely to blame for this calamity.
Slope allegedly sent users’ seed phrases in plaintext to a centralized server, which allowed the breach to occur, as reported by security firm Otter. Similar to a crypto private key, a seed phrase “unlock” the monies in a crypto wallet, giving the owner complete control over those funds. Simply put, the “Plaintext” interpretation of these phrases.
To sum up, Slope made a terrible mistake that cost its customers almost $4 million. (Slope claimed in an official statement that “nothing is yet firm” about the hack, although other experts agree with Otter.)
In the realm of digital currency, however, where hacks involving millions of dollars are typical, this sum is quite small. For cryptocurrency users, however, the attack was the stuff of nightmares, as monies mysteriously vanished from wallets. It took security specialists nearly a day to catch up and figure out what had happened.
First, the Program There Are Times when Bitcoin Wallets Are so Insecure that They Are Laughable.
A company that focuses on crypto wallets might seem like it wouldn’t risk sending an unencrypted emoji, but that’s not the case. It looks like Slope committed a terrible crime by transmitting users’ seed phrases over the internet without encrypting them.
The takeaway here is that despite a company’s assurances that your money is secure and the fact that it operates in an industry where such assurances are absolutely necessary, you should always exercise caution.
A Vulnerable Point in The Chain Will Render Any Cryptographic Protections Useless.
Seed phrases and private keys are used to access your cryptocurrency wallet and should be kept secret at all times. You may also find warnings that if you lose your seed phrase and your private key, you will be permanently locked out of your funds due to the use of strong cryptography.
While that may be the case in some circumstances, even the most sophisticated cryptographic precautions will be useless if your seed phrase is mishandled by the wallet.
If You Can, Use a Hardware Wallet.
A hardware cryptocurrency wallet is a device, often similar to a USB stick, that lets you keep, spend and receive crypto coins. It typically offers more security than a software wallet, though it’s a little more complicated to use.
Both Solana and Slope urged users to move their money to hardware wallets after the Slope assault began affecting user wallets.
In theory, that’s sound advice, but in practice, most users don’t carry hardware wallets and it can take a few days to receive one after placing an online order.
If you are dealing with significant sums of cryptocurrency, one precaution you may take is to preorder a hardware wallet. Trezor and Ledger are two companies that provide such a product.
However, keep in mind that even hardware wallets might have security flaws and that wallet-producing organizations can have poor security policies and procedures. Consider the horrendous data leak that Ledger experienced, in which hackers acquired personal information like as user names, home addresses, and more. In contrast, the reputable cryptocurrency hardware wallet Trezor does not now support Solana.
The Use of A Centralized Exchange Can Be a Lifesaver in Certain.
Not your keys, not your coins is a common crypto adage. What this implies is that you have no real say over what happens to your coins if you store them with a third party like a centralized crypto exchange.
However, if you were concerned about the security of your coins after yesterday’s Slope hack and didn’t have access to a hardware wallet, the safest option would be to deposit them into an exchange like FTX or Binance, neither of which is likely to have been compromised. As a temporary precaution, it was a viable choice; once the dust settled, you could always transfer your coins elsewhere.
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