994
views

How does a Replay Cyber Attack Work?

The replay technique is among the many attacks that have made hackers rich over the years. The phenomenon was born before the invention of cryptocurrencies and has grown in recent years.

This article will deal with various aspects related to the topic. First of all, it will be helpful to understand how a typical replay cyber attack works. Secondly, we will focus on how a criminal can use this technique in the crypto world.

There are several user protection techniques, and every reader must be familiar with them.

Replay attacks before cryptocurrencies invention

The general concept of a replay cyberattack is relatively straightforward. For example, imagine a group of criminals discovering the credit card information of a bank’s customers. At this point, hackers can easily carry out operations online.

Today, all banks allow you to block a cloned credit card very easily. Regardless, customers typically record a few unauthorized suspicious expenses before freezing the card.

The most attentive customers can proceed to block the payment method quickly. However, these hackers succeed thanks to customers who are slower to identify the scam. For this reason, a replay attack usually targets a large number of users.

Another form of replay attack involves the theft of a password. How many of us have saved our credit card information on e-commerce portals? Hackers can use this mechanism to make purchases with our payment methods.

The concept of “hard forks” in the blockchain industry

It is time to introduce a popular concept into the blockchain universe. Experts speak of a “hard fork” when a chain splits into two components.

What happens, in this case, is that one side keeps the original protocol of the blockchain. However, the other adopts a different protocol, with several technical differences.

These divisions occur because those who own cryptocurrencies have governance rights over the system. Shared governance leads to internal discussions on various issues. In practice, users can vote on the new technical changes to the blockchain.

In some cases, users may deviate from the original cryptocurrency infrastructure. Therefore, we speak of a hard fork in the sector precisely.

Over the years, the market has seen many cases of hard forks. The one customarily mentioned is the birth of Bitcoin Cash (BCH), with a split from Bitcoin (BTC). However, not everyone knows that BCH also had its hard fork with the advent of Bitcoin SV (BSV).

The internal clash between developers is often very evident during a hard fork. Each of the above systems claims to be “the original Bitcoin“.

How can a hacker exploit hard forks in crypto?

The reason we considered it essential to explain the hard fork concept to the reader is related to the behavior of hackers. A criminal can find opportunities to break into the blockchain system during these splits.

As always, a practical example can help us better understand the whole flow. Let’s imagine that a group of CoinA developers leads to the birth of CoinB through a hard fork. From the point of view of a CoinA holder, we have the following scenario:

  • Assuming that the investor has 100 CoinA, he would keep this amount in his wallet
  • At the same time, the system would award him 100 CoinB

The perfect opportunity for a hacker in this situation arises when the holder spends only one of these tokens. If the investor pays 100 CoinA, he uses his digital signature to approve the transaction.

A hacker with good technical skills can find this digital signature, which generally would not have much value. However, in the particular case of a hard fork, this information takes on enormous importance.

The hacker can replicate the approval passage of CoinA on the same quantity of CoinB. An important detail is that the digital signature must work with the same wallets (sender and receiver).

Therefore, it is clear that the hacker must skillfully find a way to receive the first amount of 100 CoinA on a wallet owned by him. Only in this way will it be possible to replicate the transaction with the same amount of CoinB, making a personal profit.

User protection

When a hard fork occurs, blockchains typically recommend not making crypto transactions. This simple countermeasure seems to be the simplest method to avoid replay cyber attacks.

Of course, the no-transaction recommendation is provisional. Usually, a blockchain is able, following the hard fork, to protect its infrastructure from these attacks.

The first days following the hard fork represent the moment of highest vulnerability in the system. The problem is that hackers are aware of this tendency.

Other user protection tools consist of blocking cryptocurrencies of the new blockchain. In addition, many systems allow you to block wallet transactions temporarily.

Conclusions

While stealing credit card information or a password is a popular scam technique, we discover new vulnerabilities in the blockchain world. For example, nobody thought about the digital signature problem when the first hard forks happened.

Bitcoin Cash live price
Bch
Bitcoin Cash
$176,34
price
1.60805%
price change
BUY NOW

The growing blockchain maturity leads customers and suppliers to have a greater awareness of the risk of fraud. Future hackers will need to be more creative to succeed in their scams.

Stay up to date with our latest articles

More posts

What is Tornado Cash, and How Does It Work?

Decentralized and non-custodial, Tornado Cash is an Ethereum-based solution for privacy and anonymity. Severing the on-chain link between those who send and receive coins enhances transaction anonymity.  This guide will provide our readers with more insight into Tornado Cash. We will start with a general introduction and move deeper into how Tornado Cash works. We will also add a list of pros and cons to this system for the reader's benefit. Understanding Tornado Cash Decentralized protocols such as Tornado Cash…

What Is the Blockchain Scalability Trilemma?

In the context of decentralization, security, and scalability, the Blockchain Trilemma refers to the generally held notion that decentralized networks can only deliver two of the three benefits at any given moment. In this article, we more closely into the matter, assessing all the most relevant aspects of the blockchain scalability trilemma. The Trilemma Vitalik Buterin invented the term "blockchain trilemma," which refers to a conundrum that blockchain engineers face while balancing three competing demands at once: decentralization, security, and…

Do Smart Contracts Represent Legal Contracts?

When industry players use the term "smart contracts," they may mean different things. Words matter, as any contract lawyer will be able to explain. Is the word “contract” a technical overstatement, or does it trigger actual legal bindings? The industry needs to agree on the consistency of its terminology. What exactly is a smart contract? Does it have any legal implications? When attorneys and technologists use this terminology, do they understand each other? Our article will provide a short analysis,…

How Do Crypto Anti-Dumping Policies Work?

Scammers utilize social media platforms to impersonate celebrities or acquaintances to persuade victims to make fake investments. The rise of cryptocurrencies and the lack of regulations gave new tools to these criminals. We'll look at how the market is attempting to safeguard investors today. Crypto commentators frequently emphasize anti-dumping regulations as a deterrent to online fraudsters. What Are Pump and Dump Operations? Before dwelling on the concept of anti-dumping policies, we need to understand what is a “pump and dump”…

Understanding Layer 3 Blockchains

Scalability has become an even more pressing issue as the crypto sector experiences increased customer demand. Many of us have come across terms like “layer one” and “layer two” protocols in the blockchain world. Blockchains must be very secure due to the lack of a centralized authority. They must also be incredibly scalable to cope with growing users and transactions. Today we will learn more about layer three solutions, a technology aiming to provide scalability while maintaining top-notch security. A…

Venezuela – How Does the Petro Crypto Work?

Venezuelan President Nicolas Maduro suggested the creation of a national cryptocurrency in 2017. Officials claim that the country's oil, gas, and mineral riches back its value. However, as of today, Petro seems to fail fulfilling its purpose of rescuing the national economy. Some foreign observers believe the Petro digital currency is a trick to circumvent international restrictions. These sanctions prevent Venezuela from borrowing cash on global markets. This article will provide an analysis of the creation of this national cryptocurrency.…

Understanding Advanced Smart Contracts

The clever use of smart contracts has contributed significantly to the exploding popularity of blockchain technology. Initially proposed by computer scientist Nick Szabo, a smart contract is a collection of instructions executing automatically. This technology aims to make the contract execution as automated as possible. Many know how basic smart contracts work, but it is rare to find a guide on their advanced versions. After a basic overview, we will analyze two typical cases of advanced smart contracts. The article…

Layer 2 Blockchain Projects – A Guide for Beginners

One of the critical difficulties confronting the blockchain community is the matter of scalability. While the technology has proven its high potential over the years, several aspects limit its applicability to a large scale. The scalability problem has been on our minds since humankind came up with the first technological inventions. We'll expand on that in this post, looking at the particular case of Layer 2 blockchains. Layer 2 (L2) blockchain definition The "Layer 2 blockchain technology" concept is gaining…

A Beginners’ Guide to Permissioned Blockchains

It has been a few years since the topic of blockchain technology invaded the market for the first time. Today, people are gradually learning to see a blockchain and a cryptocurrency as two distinct concepts. The technological and financial culture is growing, and, as a result, the industry is attracting more developers and users. Among the many consequences of this trend, we find the appearance of new tools. Today we will talk about one of the many new applications of…

Hyperledger Fabric – What Is It and How Does It Work?

The cryptocurrency world continues to see new developer ideas enter the market. Today, we will simplify a technical aspect: the Hyperledger Fabric technology. Any reader interested in learning about the most complex aspects of the topic can refer to the official documentation. This article will analyze the main elements of this system, also highlighting important criticisms in the sector. Understanding Hyperledger Fabric Let's start, first of all, by understanding the origin of the instrument name: Hyperledger is an open-source distributed…