Opinion: Crypto hacks keep on happening. It’s time for a rethink
Written by Mel Gelderman
Posted on September 21st, 2023
Mel Gelderman reflects on the recent spate of hacks to hit the token space, arguing that the industry should rethink the way we expect regular people to interact with tokens.
Hacks happen all the time in the token space, and even seasoned users can get hit. We got a reminder of that last week when billionaire entrepreneur and token evangelist Mark Cuban revealed that he’d lost $870,000 in a phishing scam. Vitalik Buterin’s X account was also compromised in a phishing scam earlier this month, while North Korea’s Lazarus Group recently stole millions from Stake.com and CoinEX. These incidents highlight the risks of tokens. But there are steps we can take to prevent attacks. I think they’re crucial for mass token adoption.
Why token hacks are common ⚠
According to security firm Chainalysis, hackers stole a staggering $3.8 billion in tokens in 2022. There are reasons why hacks are so common. Attackers can use tokens without revealing their identity. Code bugs are common and people may manage their own tokens even if they are not an expert. Blockchain transactions are irreversible. This creates fertile ground for criminals.
“There are crucial steps we should take to prevent attacks.”
Fortunately, there are solutions. Many users opt for “cold” token wallets that stay disconnected from the Internet. “Cold” wallets are regarded as safer than “hot” wallets like the one Cuban was using. But hot and cold wallets both still have lots of complexities.
Protecting token users 🤗
At token.com, our approach is to make benefiting from tokens as easy as possible for everyone, whether it’s the 25-year-old expert or the curious grandma. We take custody and securely store customers’ tokens, so they don’t need to stress over remembering private keys or avoiding hacks.
“Our approach is to make tokens as easy as possible for everyone.”
The recent hacks should remind everyone that they need to be cautious with tokens. But builders should also take note. The industry needs to offer security and user experience improvements aimed at keeping users safe. If that means making sure newer users’ tokens are secure, that’s OK. We’ll struggle to get to mass adoption without a drastic rethink.
Please note: Investing in cryptoassets is risky. Due to the volatile nature of the cryptocurrency market, investors run the risk of losing their funds when they make an investment. Returns from cryptoasset investing are not guaranteed, therefore users should always be aware of the risks.