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Attacks

"Sybil Attacks" in the Blockchain - What They Are and How to Protect Your Tokens?

"Sybil Attacks" in the Blockchain - What They Are and How to Protect Your Tokens?

Anyone who has been around the cryptocurrency space for a while is probably familiar with the term “Sybil Attack.” It is an attack on the network in which a malicious entity creates many duplicate accounts to pose as real users. The goal of this type of attack is to take advantage of other users by impersonating them and using their account credentials to send or receive digital assets. Therefore, it is important that anyone who stores their crypto off of an exchange and instead keep it in a wallet or hardware vault take precautions to protect against such attacks.

In this article, we will explore what the Sybil Attacks are, how they work and some common ways in which you can protect your tokens from them.

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Learning Objectives

What Is a Sybil Attack?

A Sybil attack is when a malicious entity creates many duplicate accounts to pose as real users. This makes it difficult for the system to determine the actual number of users in the network.

This type of attack can be perpetrated by anyone, but usually occurs when someone wants to send a transaction, but they would like to make sure their transaction is conducted on their own behalf and not on behalf of some impersonator. To do this, they create many accounts and use them simultaneously to conduct transactions.

The goal of this type of attack is to take advantage of other users by impersonating them and using their account credentials for digital assets. For example, someone could create an account with a high reputation score so that it looks like that person has more money or followers than they actually have.

How does Sybil Attacks Work?

In order to launch a Sybil attack, the perpetrator of the attack needs to create many accounts on the network that they will use to impersonate legitimate users. They then need to gain access to an account that is already on the network and impersonate that user. This is done by compromising their email address or password.

If you own cryptocurrencies, it is important that you use a secure password management system like LastPass or KeePass in order to make sure your passwords are not easily compromised. Not only can this provide a layer of protection against malicious actors attempting to take advantage of your account, but it can also protect against unintentional phishing attacks.

Another common precaution that people take against Sybil attacks is using two-factor authentication (2FA) with an authenticator app like Google Authenticator or Authy. This device acts as your second factor for logging into your account and prevents attackers from gaining access by hijacking your phone number or email address if they have stolen your password or 2FA code.

Ways to Protect Your Tokens From Sybil Attacks

There are many ways in which you can protect your tokens from Sybil Attacks. Some common methods are:

  • Electrum wallet - This wallet uses a key derivation function to create and store multiple keys for your account, making it very difficult for someone else to access your account.
  • Hardware wallet - A hardware wallet stores the private keys on a piece of hardware that is separate from the computer you use to interact with the Bitcoin network; therefore, if an attacker were able to gain access to your computer and steal your hardware wallet, they would not be able to make any transactions on the account.
  • Using two-factor authentication - Two-factor authentication comes in many forms such as Google Authenticator or Authy. With this method, when you log into a client application on your phone or PC, you will have to enter a code that is sent via text message or email before you can log into the device. It creates another layer of security by requiring something that only you possess like a password or some other form of identification.
  • Coinbase Account Recovery - If you ever lose access to your account on Coinbase then they offer a recovery option so that you can restore all of the funds that were stored in it back onto the blockchain and avoid having them permanently lost.

Conclusion

Avoiding a sybil attack is not always easy and it's important to have an understanding of what they are, how to protect your tokens, and the factors that contribute to a successful or unsuccessful sybil attack.

The blockchain is a distributed ledger that stores data in a secure and decentralized manner. In reality, the blockchain is just a database that allows for people to trade tokens without a third-party intermediary.

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