Hardware Wallet Fix The Bug To Rampant DeFi And NFTs Hacks

In the past several months, hackers have increased the rate of hacks and attacks within the crypto space, decentralized finance (DeFi), and non-fungible tokens (NFTs), with scammers, recently exploiting the vulnerability existing on social media accounts linked to Bored Apes Yacht Club (BAYC).

According to many industry experts, the volatility and staggering high dollar value of non-fungible tokens (NFT) might have distracted many investors from updating their security operations to avoid exploits. This vulnerability has allowed scammers to exploit collectors using very complex strategies.

In an exclusive interview, an undisclosed scam victim remorsefully narrated how he fell for a classic message sent over Discord that caused him slowly but all too quickly to lose all his most valuable digital assets.

In most cases, many scams on Discord occur in a very familiar fashion, where scammers breach into a roster of members on the servers and then send direct phishing links, luring them in the hope they will bite some drops. The anonymous victim noted:

“It happens to the best of us, and those are not the words you want to hear about a hack.”

Nonetheless, the anonymous victim has outlined the top three vital things he learned, such as using hardware wallets to double up on security, minimizing the use of hot wallets, and ignoring direct messages from unverified sources. He noted:

“After my hack, I was immediately reminded. I cannot reiterate it enough, never share your seed phrase. No one should be asking for it. I also learned that I could no longer forego security at the privilege of convenience.”

By design, hot wallets are much more seamless and quicker to trade with. However, they do not have extra advantages such as security of pin and passphrase, unlike hardware or cold wallet. MetaMask and Coinbase are perfect examples, using hot wallets, make users vulnerable and susceptible to hacks.

Unlike hot wallets, cold wallets are applications or devices that allow users to access their private keys without needing the internet. Hardware wallets are the most sophisticated security applications. Since they operate online, Hardware wallets prevent unauthorized access, hacks, and other typical vulnerability notable when users are online.

A hardware wallet allows users to set up a personal pin that unlocks their hardware, creating a secret pass phrase as an added layer of security. Under this functionality, hackers need to know the recovery phrase and pin before initiating a transaction.

Passphrases are less famous than seed phrases since users may not use hardware or be familiar with the mysterious passphrase. Unlike passphrases, a seed phrase allows users to unlock a set of wallets that correspond with it.

How Do Pass phrases work?

In most cases, passphrases are an extension of the seed phrase. They mix the randomness of the given seed phrase with the user’s input to compute different sets of addresses. Passphrases are the ability to unlock hidden wallets on top of other wallets.

Users can now go the extra mile and create decoy wallets to diffuse any potential hack from targeting one main wallet. This feature is beneficial when authenticating but miserable if forgotten. The only way users can retrieve their hidden wallets, imputing the exact passphrase, character by character. However, users should place a passphrase somewhere secure away from any personal contact or an online device. Preferably, it should be stored on paper and kept somewhere secure.

Passphrase on Trezor Explained

Trezor is the world’s first software provider for hardware wallets with passphrase functionalities. After installing, connecting, and unlocking the hardware wallet, users can press the advanced setting to enable the passphrase feature.

Trezor features two different prototype models, Trezor One and Trezor Model T, enabling users to activate pass phrases differently. Trezor Model One allows users to type their passphrase on the web browser.

On the other hand, Trezor Model T allows users to use the device touch screen pad to type out the passphrase or type it within the web browser. After the user keys in the passphrase in both models, it will appear on the device screen, awaiting confirmation.

Disadvantages of Passphrases

Although the passphrase is considered more of an added advantage, there are risks of hacks. Passphrases are firm due to the second step of authentication, making them more vulnerable. If forgotten or lost, the assets are gone as well. The anonymous victim summarized, noting:

“Sure, these extra layers of security take time and the extra precaution and may seem a bit over the top, but my experience was a hard lesson in taking responsibility to ensure each asset was safe and secure.”