Here’s how Web3 users can protect their digital assets from cyber criminals targeting crypto wallets.
Why is protecting your digital assets in the Web3 era important?
For the majority of users back in the day, cybersecurity meant protecting important files and folders because nothing of monetary value was stored on our computers. As long as a security solution could protect unwitting users from clicking on malicious websites or downloading harmful software, it was considered sufficient and reliable.
Fast forward a decade, and the very meaning of “digital” has changed drastically with the introduction of crypto assets — coins and tokens that hold real-world value but only exist in the digital world. Thanks to decentralized platforms that utilize blockchain technology, users can own and control their digital assets ranging from cryptocurrencies like Bitcoin to nonfungible tokens (NFTs) worth millions of dollars. This, in turn, has made the internet something akin to a safe deposit box, where assets with monetary value are created, stored and exchanged.
Widely known as Web3, this decentralized take on the internet brought a number of new threats to cybersecurity. Users now need to protect their digital assets — arguably more attractive than graduation photos and other files with sentimental value — from getting stolen. Since the responsibility of safeguarding personal digital assets rests solely on the shoulders of the Web3 user, it’s more important than ever to understand online threats and utilize best practices to fend them off.
What are the most prominent security threats in the Web3 ecosystem?
The Web3 ecosystem’s malicious actors combine dated yet effective methods like phishing, with newly-formed methods that target Web3-native attack surfaces, such as self-custody crypto wallet attacks. Phishing attacks alone increased by around 40% in 2022, showing the growing need for cybersecurity solutions tailored for the Web3 space.
Here are the most prominent Web3 security threats hindering the mass adoption of decentralized finance:
- Fake wallets. Cybercriminals gain access to users’ crypto wallets by tricking them into entering their private keys into a fake crypto wallet.
- Phishing attacks. Users are led to online platforms designed to gain users personal and financial information by mimicking official applications and wallets.
- Scam emails and messages. Users receive deceptive messages and emails with content focused on finding out their private keys or directly asking them for money for whatever reason.
- Malware downloads. Files downloaded from the internet can contain harmful software (malware), resulting in critical information being stolen remotely, including crypto wallet keys.
Human error. Not all losses are caused by third parties — some are just accidents that happen because the user overlooked something. Users can sometimes mistype a wallet number and send funds to the wrong address.
What measures should you take to safely navigate in Web3?
Self-education about Web3 and decentralized applications (DApps) is crucial when it comes to tackling security threats. Crypto owners should be aware of the dangers they could face and be able to assess the legitimacy of any opportunities offered to them.
Users should always check the URLs of websites and verify the links they are directing to, bookmark their frequently used websites to avoid fraudulent copycats, double-check wallet addresses before confirming transactions, and consider sending a smaller test amount first before committing to a large transaction. Wallet security should always be the number one priority.
Users should also enable two-factor authentication wherever possible and never share their private keys and recovery phrases online. Trusted networks should be the main way users interact with Web3. Avoiding public Wi-Fi is also a necessity, as hackers can use fake public Wi-Fi networks to retrieve information from devices.
What to look for when choosing a crypto wallet for your digital assets
A crypto wallet is the primary tool for storing digital assets, and it comes in two main forms: hot and cold. Hot wallets are software-based, and they maintain a constant internet connection. Cold wallets, also known as hardware wallets, store digital assets completely offline.
When choosing a wallet, a user should determine their needs and choose accordingly. Buying a cold wallet won’t be worth it if you plan to only store small amounts of assets. If you decide on a cold wallet, one produced by an official store is recommended. Unauthorized third-party resellers can offer cold wallets for a bargain, but using them runs the risk of the device carrying malicious software. As for hot wallets, users should pick one that is widely used and trusted, such as MetaMask or Trust Wallet.
How to choose the right tool to safeguard your digital assets
Choosing the right tool to guard digital assets is a vital part of the Web3 experience. One of the most prominent tools for this is good Web3 security software. An effective antivirus tool offers significant benefits:
- Real-time protection. The software audits transactions in real time, identifying risky logic, critical vulnerabilities and compromising permissions to warn the user of malicious activity. This proactive approach acts as a barrier, helping users avoid suspicious transactions while navigating across the Web3 space.
- Anti-phishing features. This feature saves crypto enthusiasts from disaster by detecting and blocking phishing websites.
- Regular updates. Given the dynamic nature of cyber threats, it is paramount that your antivirus software receives regular updates to its virus detection database. This upkeep is crucial in enabling the software to proficiently identify and defend against the latest threats.
Web3 Antivirus (W3A), is a Web3 security tool built to address Web3 security issues specifically, carrying all three of the above features. W3A automatically warns users and blocks access if they enter a previously identified phishing site, minimizing security risks.
The security tool audits each transaction before the user signs it, identifying risky logic, critical vulnerabilities and compromising permissions that could access users’ assets.
W3A conducts direct audits of smart contracts and examines tokens’ characteristics, such as creation date, collection, owners, and the smart contract governing the collection. It also alerts the user if the transaction appears suspicious.
W3A also simulates the transaction to demonstrate the potential outcomes, illustrating both what will enter and what will leave the user’s wallet.