The Best Practices for Web3 Security Risk Mitigation

Introduction

If you're like most people, you've probably heard of the internet of things (IoT) and smart cities, but what about web3? Web3 is a term that refers to any type of computer-based system that connects humans and other devices via the cloud. It's basically what we have now: mobile apps, IoT devices, and even smart home systems.

Web3 is a fast-growing, but hotly debated tech movement. Web3 proponents widely reject the centralized control of Big Tech and coalesce around a vision for decentralization -- specifically, an internet that uses blockchain-based architectures to distribute power and grants end users greater control, stake, and economic benefit.

Tech builders and businesses must take a proactive approach to security when evaluating Web3's potential. Blockchains and cryptocurrencies have been the subjects of growing security concerns, from traditional issues of social engineering, insider exploits, and faulty implementations to an emerging class of Web3-native exploits across decentralized applications, exchanges, and wallets.

The problem is that criminals can use these same technologies to steal your money or identity information. This article highlights the risks and vulnerabilities within the Web3 ecosystem and the best practices for Web3 security risk mitigation.

So, let’s delve in.

Blockchain & Its Vulnerabilities

The blockchain is a decentralized technology that powers cryptocurrencies like Bitcoin. But this is just the beginning. The blockchain can be used for everything from tracking assets to verifying identities, and many of these applications are currently in development.

The blockchain space is home to some of the most innovative technologies in the world. But with these new tools come new risks, and security leaders can help mitigate those risks by following some simple Web3 security best practices for risk mitigation.

Attacks in the blockchain space are often more damaging than traditional applications. These events are often irreversible and contingent on smart contracts, which, if exploited, cascade across the network rather than a single node.

As these new applications take hold, cyberattacks on the blockchain are becoming more common and more damaging than traditional applications. These attacks are often irreversible and contingent on smart contracts, which, if exploited, cascade across the network rather than a single node.

Blockchain vulnerabilities are real. In fact, according to Forbes, there have been several high-profile crypto heists in recent years that have taken place on blockchains—and many cybersecurity experts would agree that a 51% attack represents just a learning curve for these companies. In 2020, bitcoin gold suffered a 51% attack resulting in over $72,000 worth of bitcoin gold tokens being double-spent. And just last month, Axie Infinity was hacked to the tune of $625 million by hackers stealing from the underlying Ronin blockchain—taking crypto heists to shockingly high levels.

Many in the cybersecurity industry would regard an event like this as a learning curve for companies operating on blockchains; however, it’s an expensive lesson.

If you’ve been following the news, you may have heard about the 51% attack on bitcoin gold in 2020. If not, here’s a quick recap: A hacker stole over $72,000 worth of bitcoin gold tokens from the blockchain. They did this by double-spending their own currency and spending it on themselves.

The good news is that this kind of attack isn’t possible in a blockchain that has more than 51% of the miners operating in unison. In fact, most cryptocurrencies like bitcoin gold have such a high percentage of mining power that they are considered totally impenetrable by malicious actors—as long as there’s no collusion among them.

But what if there are collisions? What if hackers conspire to work together to take over 51% of a blockchain? The answer is: It happens all the time! In June 2019, hackers stole $625 million worth of cryptocurrency from Axie Infinity by hacking into Ronin—the underlying blockchain. This was an unprecedented event.

Security leaders can help mitigate the risks by following these Web3 security best practices for risk mitigation:

1. Know your network and its components.
2. Check your access control lists (ACLs).
3. Monitor network traffic and data flows to identify threats before they do too much damage or cause downtime after an attack has occurred.

Cryptojacking

Cryptojacking is a type of malware that uses your computer to mine cryptocurrency. The concept has been around for a while, but it's only recently become a real problem.

In the past year or so, cryptojacking has become a large-scale problem for users of Windows and MacOS—the two most common operating systems used to access the internet. This is because the majority of cryptojacking attacks are using Trojans or other types of malware that are designed specifically to infect computers and allow hackers to take over their computing power without their consent.

In the State of Consumer Cybersecurity report by Reason Labs, it was unveiled that 2021 was the "year of the miner," moreover, almost 60% of all Trojan activity detected last year were miners. Cryptojacking can affect almost any device that runs on a web browser and has access to the internet. That means it could be on your phone, laptop, tablet—you name it!

And because this is one of those things that's hard to understand from a technical perspective, let's break down what cryptojacking is and why it matters:

• Cryptojacking uses your computer or device's computing power to mine cryptocurrency without your consent. It does this by hijacking your CPU/GPU resources (the hardware and software used by computers), which means that if you want to play Fortnite on your iPad while surfing the web in Safari on your laptop, then you might find yourself unwittingly mining cryptocurrency while playing Fortnite.

  
  

• Cryptojacking can lead to malware infections or other types of malware that can steal personal information from infected devices or even encrypt files and hold them for ransom until the money is paid in exchange for decrypting them.

  
  

This is bad news because it means you could be wasting your money on electricity bills if you don't know what's going on behind the scenes with your computer. If you have been keeping an eye on the Web3 “Industrial Revolution”, you are likely aware that there are a lot of things going on right now. From the project’s inception to its current state, there has been a lot of change.

Phishing Attacks

One of the issues that many people are concerned about is phishing attacks. Phishing attacks can happen in many ways and they often use social engineering as well as other methods to lure unsuspecting victims into giving up their personal information or funds.

Phishing is nothing new; however, the manner in which it’s being used today is. In October 2021, attackers used phishing emails to rob cryptocurrency from 6,000 customer accounts at Coinbase by exploiting a flaw in its two-factor SMS system. Another malicious example of this kind of theft was seen in February when $1.7 million in non-fungible tokens (NFTs) were stolen in a phishing attack on OpenSea users. Over 250 tokens were stolen by an attack that exploited a hole in the Wyvern Protocol, which is the standard that underlies most NFTs.

One way that phishing can be used to steal money from your wallet is through the use of email scams (also known as phishing). These email scams are designed to trick people into thinking that they’re partaking in a legitimate activity when in reality it is only meant to steal their money. For example, an attacker might send out an email claiming that they have found an error with your account with Coinbase and asking for your details in order to fix it. If you give them this information then your account will get locked so you won’t be able to access it anymore until you pay them back.

Web3 Security Risk Mitigation Overview

Web3 is a decentralized, distributed, peer-to-peer network that connects people, businesses, and applications. It's a network of computers that uses blockchain technology to securely store data with shared access.

Web3 is the next generation of the internet—it was developed to address security threats to blockchain networks such as Ethereum in order to ensure their continued growth and success. There are several steps you can take to reduce this risk while using web3, a few have been mentioned in the sections below.

Do Your Research

Do your research. Before you enter any personal information on a website, make sure it's secure by checking the following:

• Make sure the site is verified by a third party such as Google or Bing. A verified badge means that other people have already reviewed and found it safe to use in addition to your own diligence.

  
  

• Look for a lock icon in your browser indicating whether or not this particular page has been encrypted with HTTPS (the secure version of HTTP). The green address bar at top of each page will also tell you if there is an SLLP protective layer protecting the data being sent from server to browser, which should be seen as good news.

Be Aware of Impersonation Attempts

Impersonation attempts are common, and they can be difficult to detect. However, you should be aware of them because they can lead to serious consequences if not detected in time.

If you suspect that someone has impersonated you on the Internet, report the incident immediately by emailing [email protected]. This will help us investigate what happened and prevent further abuse from happening as we work with our partners and security teams around the world to resolve these issues. If it is possible for us to restore access to your account but not remove any personal information (like passwords), we ask that you contact us so that we can provide instructions on how best to proceed moving forward together.

Avoid Clicking on Anonymous Links from Social Media

Clicking on links from social media can be dangerous.

• Don't click on links from unknown sources. Social media platforms are often used to distribute malware, so it's important not to click on links sent by these platforms.

  
  

• Don't click on links from people you don't know: As a rule of thumb, if someone sends you an email asking for help with their company or product and does not provide their name in the body of the email (i.e., "Hello, my name is XYZ"), then chances are good that they're trying to sell something through social media channels like Facebook or Instagram rather than just being helpful for free! This may cause some confusion about whether or not what he's trying to sell is legitimate—so remember: always check before clicking any attachments.

Don’t Ever Share Your Password

• Make sure you're the only one who knows your password. Don't share it with anyone, and don't use the same one for multiple websites.
• Write down your password in a safe place—like a locked drawer or cabinet—and never leave it lying around where someone could find it easily.
• Don't use a simple phrase like "password" as part of a longer sentence (e.g., "My password is secret"). These types of phrases can be easily guessed by hackers because they contain certain patterns that are easy to break into if you know how! Instead, create an unusual combination of letters, numbers, and symbols (i.e., numbers only).

Use Reputable Sources for Downloads and Installs

The first step to mitigating web3 security risks is to avoid downloading and installing apps from unknown sources. This includes sites that don't have good reputations and may not be reputable.

A good rule of thumb for this is: If you're not sure about a site's reputation, don't download or install anything from it.

Keep an Eye on Your Account Balance

One of the easiest ways to mitigate security risk is by monitoring your account balance. While this may seem like a simple task, it's important to keep in mind that if you notice any unusual activity on social media or elsewhere, report it to the bank immediately and let them know what happened so they can help track down whoever did it.

If you don't know how much money is in your account, check out our guide for checking up on whether or not there's been any unauthorized activity with accounts.

Avoid Sharing Sensitive Information Abruptly Anywhere

• Don't share your password with anyone. Your computer, phone, and email accounts can all be hacked if you do this.

  
  

• Do not store sensitive information on your computer or phone. This includes financial information (credit card numbers), banking details, or Social Security numbers (SSN).

  
  

• Don't use cloud storage for storing any of these things as it's likely to be insecure and vulnerable to attacks like phishing scams which try to steal user credentials from cloud-based applications such as Dropbox or Google Drive by sending out emails asking users to update their passwords after they've been compromised via social engineering techniques like spear phishing attempts where someone pretends they're from a trusted source but actually works for a bad guy who wants access into secured areas of organization's network in order perform malicious activities such as stealing data stored there so make sure never give access codes over email message.

With Sensitization Lies the Solution

The truth is that the gap between what we know about the world and how we experience it is getting wider, not narrower.

In fact, we are more aware than ever of threats in our environment, but we are not always able to protect ourselves from them.

This is why it's important to teach consumers to ask—and provide answers to—these questions:

• What can I do to keep my devices safe?

• How can I protect myself from cybercrime?

• What can I do about data privacy?

  
  

A lot of us have been wondering what the future of consumer cybersecurity will look like. There are so many amazing ideas out there, but we're still uncertain about what they'll mean for us as consumers.

One thing is clear: it's time to start asking questions. If you're not asking these questions yet, you should be—because if you don't know where your data is going and how it's being used, then you can't protect yourself or your devices from possible attackers. And if you don't know how to recognize suspicious behavior, then when something does go wrong, you could be caught off-guard.

Now that we're learning more about how artificial intelligence (AI) can help us understand and mitigate cybersecurity threats also within the Web3 space. It's important to remember that humans are still needed when it comes to protecting our data and devices from attacks.

Conclusion

With a little common sense, diligence, and a few simple steps, you can reduce the likelihood of being attacked by criminals who are looking to steal money or identity information.

• Keep your apps up-to-date. Updates are critical for security vulnerabilities and should be done regularly. You can also install antivirus software on your computer as well as on mobile devices (if applicable).

  
  

• Install an SSL certificate that's been verified by Google’s Trusted Certificate Authority list (which includes all major browsers). This will help protect against man-in-the-middle attacks by encrypting data between clients and servers so no one other than them can read it—and therefore make sure that what they see isn't fake information themselves!

  
  

I hope you found this article helpful and informative.

I am sure that many of you will be able to apply these tips within your own enterprises, which is what will really make them so valuable.