Crypto is a risky market, not only because of the volatility of assets but also a market of the many pitfalls and risks of hacking/cheating. What is a replay attack? What can hackers do through this form of attack? What should users do to avoid it?
What is a replay attack?
A replay attack, also known as a playback attack, is a form of network security attack that uses malicious applications to intercept or delay data transmission. Then, that information is processed and repeated many times on the system or sent back at the hacker’s will.
A replay attack takes advantage of the validity of the original data (usually coming from an authorized user). The network’s security protocols will treat this attack just like a common form of data transmission. The data is then intercepted (or delayed) and transmitted natively so the hacker can perform the attack efficiently without complicated decryption steps.
How Replay Attacks Work in Crypto
Blockchains often have protocol changes or upgrades known as hard forks, a prime opportunity for hackers to use replay attacks. After a hard fork takes place, one side works on the old version, and the other works on the new version, but both versions will keep the data before the split.
This means that a transaction valid on the old version will also be good on the other ledger. Hackers can use this to simulate the transaction on the old version and fraudulently transfer the same amount of money to a wallet again.
Consequences of replay attack
A replay attack is not considered a severe form of cyber security attack because certain limitations still exist, and many measures exist to prevent it through a blockchain hard fork.
Hackers will not be able to fully penetrate the data while it is in transit because doing so will be rejected by the system, which limits the effectiveness of the hack. However, a replay attack vulnerability that appears and is exploited will cause relatively significant losses for the network and users.
In traditional markets, replay attacks can be used to gain access to information stored on a network by relaying information that is considered valid. This form can also be used to bypass financial management institutions to copy transactions, helping hackers take money from the victim’s account.
How to prevent replay attack
In the crypto market, hackers can often only take advantage of replay attacks with vulnerabilities when blockchains fork hard forks. However, at present, most blockchains, when hard fork, have added security protocols specifically designed to prevent this form of attack.
In there are two prominent groups of tools:
- “Strong replay protection”: A marker will be automatically added to the newly forked blockchain after the fork, ensuring transactions made on the new blockchain will no longer be valid on the original blockchain and vice versa.
- “Opt-in replay protection”: When users make transactions on one chain, they will have to manually mark those transactions to become invalid on the other chain. This means that users will have to make changes to their trades manually.
In addition, users can also proactively protect their assets by avoiding transactions during new hard forks. The hacker will have no trade to replay on the new chain if no marketing occurs.
With other fields
Replay attacks not only appear in the crypto market but also exist in many other areas of daily life. However, there are also ways to defend against this form of attack:
- One-time password: Use a password that is only applied once per transaction. Banks commonly use this method.
- Add timestamps on messages: This prevents hackers from resending previous messages and helps eliminate requests exceeding the specified time frame.
- Session key: Similar to the one-time password method, this is a single-use symmetric key used to encrypt all messages in a communication session.
A replay attack is not a very common cyber security attack, especially in the crypto market. However, this attack can take advantage of system vulnerabilities without performing complex data decryption. It is never too late to know how this fraud works to prevent and minimize the risk of losing assets.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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