What are cryptocurrencies?
The principle that cryptocurrencies are based on is the same as for traditional, day-to-day currencies: they are assets with a monetary value assigned to them, the only difference being that they are only available in digital format. In other words, there are no physical notes or coins. Another key aspect is that they are encrypted, that is, they can only be used by users with access to the appropriate code. Bitcoin is definitely the most popular cybercurrency, but there are others such as Ethereum or Monero.
How they work: mining and blockchain
In cryptocurrency networks, the computational effort required to validate transactions generates coins as a reward. This process is known as mining. The reward decreases transaction fees by creating a complementary incentive to contribute to the processing power of the network. However, this comes at a price, as cryptocurrency mining takes up resources (power consumption and less performance efficiency) on the machine performing the work.
The technology that makes this decentralized system possible is called blockchain. A blockchain is a database distributed among a network's participants, and whose components operate and are modified independently. Blockchains were initially conceived by bitcoin developers to facilitate P2P transactions without the intervention of a middleman (i.e. a bank or other financial institutions) and the model turned out to be a success. The transparency provided by blockchains is a powerful weapon and a useful way to ensure that user data is correct and is transmitted securely safeguarding data integrity.
Cryptocurrencies’ solid defense is however a double-edged sword. The anonymity of cryptocurrencies is one of the most appealing aspects for cybercriminals. After all, a digital currency that assures transparency and a simple transaction would appear to be an ideal method of payment for outlaw hackers. Currently, practically all ransomware attacks ask for payment through bitcoin or other cryptocurrencies.
The digital wallets used to store cryptocurrency work in exactly the same way as their real-world counterpart. If someone manages to access a cryptocurrency wallet, they'll be able to steal all of its content. And since it is virtually impossible to track these thieves, they are highly unlikely to get caught. That's one of the reasons why cryptocurrency thefts and scams are becoming increasingly popular, forcing users to take adequate precautions to protect their assets. The security measures one should take when using cryptocurrency are the same that should be observed when purchasing online. Never share details of your bitcoin wallet with strangers, and make sure your computer is properly protected from hackers and malware with a security solution like Panda Dome.
PandaLabs, Panda Security's antimalware laboratory, already stated in its Annual Report for 2017 that cryptocurrency mining infections were set to increase in frequency, as a consequence of cryptocurrency's meteoric rise during the summer of that year. These attacks consist of infecting computers, causing them to behave like miners for the attacker. While theft or loss of a user’s cryptocurrency wallet has a larger impact, in this case the affected user notices a significant decrease in their computer's performance efficiency, as its resources are used to generate revenue for the attacker.
How to protect yourself from cryptocurrency mining infections
Corporate users must have the necessary information to know how to avoid compromising the security of their organization. In this regard, employees must be very cautious when using the Internet and, especially, email. Instruct them to never download files unless they know they are safe, and never accept a request unless they are sure the person who sends it actually is the person they claim to be. Also, they must have an action protocol to communicate incidents and threats to a senior member of the organization. Add an advanced cybersecurity solution to all this, and all your corporate activities will be much more protected.