With the growing popularity of cryptocurrencies, the number of people entering the market is increasing dramatically. Unfortunately, some of these people aren’t interested in investing in cryptocurrencies as their sole purpose is to hack and steal assets that belong to others.
For example, a hacker recently cleared out around 8,000 digital wallets, containing Solana and USDC tokens, and stole over $5 million worth of crypto assets.
Such events show that cryptocurrencies aren’t unhackable and that’s where ethical crypto hackers, also called white hat hackers, come into place. They’re highly skilled individuals who work as threat-removing agents by helping companies eliminate security vulnerabilities in their systems.
In this article, we’ll discuss 5 important things that every new hacker should know to get started with their ethical hacking journey.
Why Ethical Hackers are Vital to the Crypto Industry
An ethical hacker (named Satya0x) won $10 million recently for discovering a serious bug in Ethereum core bridge contract of the platform.
This incident explains why ethical hackers are vital to the crypto industry. The main objective of these individuals is to make the cryptosystems safe for everyone.
Just like any other digital system, crypto platforms also have their own vulnerabilities that malicious online actors can exploit. Ethical hackers perform various tests to identify these weaknesses and inform organizations about them so that they can be eliminated.
For example, they can perform penetration tests to identify potential vulnerabilities, conduct stress tests to detect malware or simulate DDoS/DoS attacks to test the system’s resilience.
So, it’s safe to say that ethical hackers are critical to ensuring the security of the crypto market and building a digital world that is safe and trustworthy for everyone.
What Every New Crypto Hacker Should Know
If you’re new to ethical crypto hacking and want to become an expert, here are 5 things that you need to know.
1. Learn the Fundamentals of Ethical Hacking
First and foremost, it’s essential to understand different types of hacking.
- White Hat Hacking: As mentioned earlier, white hat hacking is ethical hacking that’s used to improve system security. These hackers work with the system owner’s permission and within a set of ethical and legal guidelines.
- Black Hat Hacking: Black hat hacking is malicious hacking done for personal gain. Hackers involved in this category break the law and can face serious consequences if caught.
- Grey Hat Hacking: Grey hat hackers fall somewhere in between white hat and black hat hacking. They might not have malicious intentions, but they don’t always report vulnerabilities to the system owner.
You should aim to become a white hat hacker. To achieve that, you’ll need to work within a framework of ethical standards and legal boundaries. It’ll help you ensure that your actions don’t cause harm to anyone and are only used to help crypto organizations improve their security posture.
Additionally, you should also understand the importance of consent, which means obtaining permission from the system owner before performing any hacking activity.
Keep in mind that your actions will be seen as a cybercrime, even if your intentions are good if you fail to obtain permission, and it can lead to legal and ethical consequences.
2. Familiarize Yourself with Crypto Technology
To become a successful cryptocurrency hacker, it’s crucial to have a deep understanding of blockchain technology and cryptography.
Blockchain technology is the backbone of most cryptocurrencies, and it’s what allows for secure, decentralized transactions. It’s basically a digital ledger that stores all transactions made on a network, and a global network of computers is used to maintain it.
Cryptography is another critical aspect of cryptocurrencies that you should understand. It’s the practice of using mathematical algorithms to secure data and communications.
Cryptographic algorithms are used to secure transactions on blockchain networks and protect users’ digital wallets. To be an effective hacker, you need to have a good understanding of how these algorithms work, their strengths and weaknesses, and how to exploit them.
Here are some of the key cryptographic techniques used in cryptocurrency development:
- Hash functions: These are one-way mathematical functions that take an input (such as a transaction) and produce an output (the hash). The output is unique to the input and is used to ensure that the transaction hasn’t been tampered with.
- Keys: Public and private keys are used to secure wallets and transactions. A public key is visible to everyone and is used to receive transactions, while a private key is kept secret and is used to sign transactions.
- Digital signatures: They’re used to ensure that transactions are authentic and haven’t been tampered with.
3. Understand the Different Types of Attacks
Hackers use a variety of tactics to attack crypto networks and understanding how they work will help you become a better ethical hacker.
This type of attack is launched on blockchain networks to take control of the majority of the network’s computing power or hash rate. It allows the hacker to manipulate the blockchain’s ledger by double-spending (which means a single cryptocurrency can be spent twice or more).
It’s one of the most dangerous cyberattacks against crypto assets, and not even an antivirus program or VPN service can protect users from it. The only way to prevent it is to make sure that no single group/entity controls over 50% of the network’s hash rate.
In a Sybil attack, hackers create multiple fake identities to gain control of the majority of the network’s computing power. It allows them to reject legitimate transactions and approve fraudulent ones.
Although it’s pretty difficult to execute a Sybil attack on a blockchain network, as the use of proof-of-work algorithms has made it expensive to create fake identities, it’s still possible. Typically, hackers use it to manipulate smaller blockchain networks as they have fewer nodes to take control of.
A routing attack allows hackers to take advantage of the routing protocols used by ISPs (Internet Service Providers). They use it to redirect network traffic to different destinations to intercept and modify/block the network traffic.
In a blockchain system, this attack can result in the partitioning of the network. Each part continues to work as usual but becomes unaware that other parts are also operating.
It allows hackers to create a huge number of fake transactions in one part, which forces the network to reject legitimate transactions and accept fraudulent ones.
4. Build/Improve Your Skills
As a cryptocurrency hacker, you need to have a solid foundation in the following areas.
As a crypto hacker, understanding the architecture of different blockchain systems is essential. It’ll help you identify potential vulnerabilities and develop effective strategies to exploit them. It includes:
- Consensus mechanism used to validate transactions
- Storage and management of data on the blockchain
- Network topology used to connect nodes in the network
A solid understanding of data structures will allow you to identify potential attack vectors related to the organization and storage of data on the blockchain. Some of the popular data structures used in blockchain systems include Merkle trees and distributed hash tables.
Smart contracts have the terms of the agreement between sellers and buyers written directly into the code, which makes them self-executing. Crypto platforms use them to automate complex business processes to save time and effort.It’s important to note that these contracts are a common target for crypto hackers, so it’s important to build a strong understanding of how they work. You’ll need to learn smart contract programming languages like Solidity, Rust, and Vyper, depending on your hacking needs.
You’ll need to be proficient in these languages to understand and write code to exploit vulnerabilities in different blockchain systems.
Penetration testing is a process of evaluating the security of a system by launching cyberattacks. It includes testing the network, software, and hardware components of the system for potential weaknesses.
It’s an invaluable skill to learn as it allows you to detect vulnerabilities in a crypto platform that black hat hackers can exploit.
5. Keep Up with the Latest Trends and Developments
Keeping up with the latest trends is an essential aspect of being a successful and reliable crypto hacker.
Here are some key points to consider when trying to stay informed about the latest industry developments.
Follow Reputable Crypto News Websites
There are numerous websites and social media channels dedicated to covering the latest crypto industry news and trends. By following these sources, you can stay updated about new technologies, regulatory changes, and other important developments that can impact the security of blockchain-based systems.
Join Ethical Hacking Communities
Joining a community of ethical hackers, such as HackenProof, can be an excellent way to stay informed about the latest security trends and techniques. They offer a platform for sharing knowledge, discussing new hacking techniques, and collaborating on projects.
We also provide access to training resources, mentorship programs, and job opportunities to improve your skills and knowledge.
Attend Conferences and Events
Attending industry events and conferences is a great way to learn about the latest trends and technologies in the crypto industry.
These events provide an opportunity to network with other professionals in the field, attend workshops and seminars, and gain insights from expert speakers. Some popular events include Consensus, Blockchain Expo, and World Crypto Con.
Participate in Bug Bounty Programs
Bug bounty programs are initiatives run by organizations to incentivize ethical hackers to identify and report vulnerabilities in their systems. Participating in these programs will help you gain hands-on experience in crypto hacking and learn about new attack vectors and techniques.
Becoming a successful crypto hacker requires dedication, persistence, and a continuous desire to learn and improve. You need to develop a comprehensive understanding of the crypto industry and its technical aspects.
Additionally, you’ll also need to stay updated with the latest trends and developments to improve your skills and stay competitive. Remember to approach this work ethically and responsibly, and always follow legal and ethical boundaries to avoid unwanted scenarios.
We hope this guide has provided you with valuable information to enter the world of crypto hacking and become a skilled and respected hacker.