It seems that crypto hackers are once again on the prowl and this time, they are going after passphrases. However, a lot of them seem to be on the hunt for brain wallets. BitMEX Research recently published a report, which indicated that hackers have been scanning the Bitcoin network round the clock to find easy-to-crack passwords within brainwallets. Essentially, a brainwallet allows you to memorize your private key, without having to write it down anywhere. Rather than owning a physical wallet or a wallet app, the seed phrase can be stored in your mind and employed whenever you wish to initiate a transaction.
Through this method, the only way a hacker could get access to your Bitcoin is if you share your private key. As long as you don’t have a problem in remembering your key, this method of storing your assets is both user-friendly and secure. As far as creating a brainwallet is concerned, the process is quite straightforward. Users are required to obtain a seed-generation device, such as Electrum or Armory, and can use it for creating a passphrase they can recall easily. However, as discovered by BitMEX Research, hackers are on the prowl for some variants that are easy-to-crack.
Even though the majority of them are mere guesses, they have undoubtedly become quite rampant because hackers have gotten desperate with their research. It was explained in the report that hackers are setting up servers for crawling the Bitcoin blockchain to find possible victims. The research highlighted that there are 12 or more words in most mnemonic seeds and users tend to opt for a combination of words they use regularly. Most of these words depend on pop culture references that are easy to remember. As hackers have gotten onto this fact, they are now targeting a lot of wallet owners.
Eight brainwallets were created by BitMEX Research in its study by using pop culture references. Some of these references were taken from prominent books like Pride and Prejudice, Moby Dick, and the Christian Bible. According to the research team, these wallets were hacked within a day. In fact, one wallet was drained within a second of its creation. Eventually, the company warned that people who were creating brainwallets should exercise more caution about the words they go within their seed phrases. The issue with brainwallets is just one more of the security problems that are plaguing the crypto industry at this point.
Last month, KuCoin, a top crypto exchange was hacked and the criminals managed to get away with millions in assets from the hot wallets. According to a company statement, the hackers had gotten their hands on the private keys of KuCoin’s wallets. From there, they had stolen numerous tokens and had moved them to other exchanges. As per estimates, the exchange had lost nearly $200 million in user funds. Even though the company made significant progress in recovering the funds it lost, it shows that there is still a long way for the industry to go regarding security.