How To Prevent Security Breaches In Bitcoin Exchanges

How To Prevent Security Breaches In Bitcoin Exchanges

Warm greetings from bitdeal! 

Today we are going to see about an interesting and a major issue which often creates big controversies in bitcoin exchanges. Yes, Hacking and Security breaches in bitcoin exchanges and how to prevent it. 

Before that we just want to list out some statistical records of hacking issues which have created thunderstorms in entire cryptocurrency network. 

Interesting and Jaw dropping cryptocurrency exchange hacks

The first cryptocurrency exchange hack was done in 2011, the most famous bitcoin exchange Mt.Gox have failed to prevent data’s from hacking,  and which cause the exchange to loss a lump amount of 2609 BTC, But the interesting thing is, this exchange was hacked twice and the second time hack was quite bigger than the first one. The stolen amount of second time is approximately +750000 BTC and it was happened in 2014. 

In October 2013, 

There was an exchange silk road has been attacked by hackers where as the stolne amount was nearly $270,000,000. 

In 2014 July, 

Cryptsy exchange was hacked. The attacker injected Trojan Malware and have hacked an amount of $95,00,000.(13,000BTC).

In 2014 December,

Mintpal was hacked and have loosed an lump amount of $3,200,000(3,894 BTC)

In 2015 January, 

One of the popular exchanges Bitstamp has been hacked, where as the amount is $5,100,000. 

In 2015 February – Bter Exchange, Stolen amount (7,000 BTC)

In 2016, August  -  Bitfinex, Stolen amount (12,000 BTC)

In 2017, December  -  Nicehash, Stolen amount (4,000 BTC)

In 2018, January  -  Coincheck, Stolen amount  $534,800,000.

In 2018, April  -  CoinSecure, Stolen amount  $3,300,000.(438 BTC)

In 2018, June  -  Coinrail, Stolen amount  $40,000,000.

In 2018, September  -  Zaif, Stolen amount  $60,000,000.(5,966 BTC)

In 2018, October  -  MapleChange, Stolen amount  $6,000,000.(913BTC)

Take a breath, hope you now understand till now exchanges are getting hacked, with no notice. All over the world this kind of hacking is continues with no flow. 

The reason behind bitcoin exchanges hacks and data security breaches

First of all, it is important to understand bitcoin transactions are done in virtual form and all the digital assets are stored in a cloud storage.  So it is common, that cloud storage often get hacked.  

How Hacking Happens?

The main target of Hackers is “ Bitcoin Exchange Online cloud storage services “ which stores the private keys of large number of users.  The hacking is made of sending phishing emails, malicious files, Injecting malware in to the exchange code and etc. 

The another way of hacking is, hackers keep tracking the social medias for cryptocurrency conversations and collect the investors phone number also emails if they investors dropped it in anywhere.  And then they take control over the phone number by posing as victim to the customer service providers.

After getting control over the phone number, they hack the victims exchange account by resetting the password along with the phone number. This is called Phone – Porting attack.  

How to prevent hacking attacks in cryptocurrency exchanges ?

 From traders end:

A cryptocurrency expert Amir bandaeli, who lost 18% of his cryptocurrency investment in Bifinex attack, inspired him to build decentralized exchanges. And he believes this will be the future of cryptocurrency industry.

Jonathan, CO- Founder of Chainalysis advised cryptocurrency traders to keep separate email for cryptocurrency trading, and never reveal it to anyone.  Also he advised set a  really hard and longer password. 

Dan Romeo, Vice president of Operation at coinbase.

Turn off SMS based two factor authentication, to avoid phone porting attack.

Sean Everett, VP of product management, shared his opinion on coinbase phone porting attack 

1. Don’t share any thoughts, converstatoin on social medias about your cryptocurrency activities

2. By contacting your phone services provider, enable muti level security establishments that you can do.

Adam Dachis, Digital consultant advised that don’t keep all your investments in one place. Better diversify it among several exchanges, so that you can prevent your loss of ratio.

Sanjay Beri, CEO of Netskope

Better start using cold wallet which is entirely offline, so that we can safeguard of private keys. But be aware whether your pocket has holes. 

From exchanges end:

We can’t entirely prevent hacking but we can reduce the amount of occurrences. There is only one solution to prevent all these hackings. 

We can prevent all these unexpected hacks by “Making the exchanges Decentralized”.

What are decentralized exchanges?

Difference between centralized Exchanges and Decenralized Exchanges

Better make the exchange website with fully developed “ Decentralized Exchange Script ” and ensure the following things are added with your website.

Tricks to build secured bitcoin exchange:

1. Ensure your website is made up of bug less, and solid secured bitcoin exchange source code

2. Integrate DDOS Attack prevention

3. Integrate Cross site scripting protection

4. Anti CSRF Protection

5. Prevent Click Jacking Attacks

And lot more.. security features 

Wrapping up.. 

Hacks in cryptocurrency network are common, but with proper security features we could reduce the occurrences. By deploying full featured bitcoin exchange and by integrating decentralization concept we could achieve it. We at bitdeal help you to develop solid secure bitcoin exchange website, by providing secured bitcoin exchange script, and decentralized exchange script. You can ask  free demo at bitdeal anytime!