If you don’t know about the Solana Hack, you must be living under the rock as it is one of the most talked-about crypto hacks the industry has seen so far. The Solana hack drained thousands of user wallets (over 8000) on the blockchain network Solana and it wasn’t a result of some system failure or security vulnerability but just bad security practices followed by Slope, a cryptocurrency wallet provider.
Otter, a security company conducted independent testing to note,
“We have independently confirmed that Slope’s mobile app sends off mnemonics via TLS to their centralized Sentry server.
These mnemonics are then stored in plaintext, meaning anybody with access to Sentry could access user private keys.”
This hack resulted in $4 million of user funds lost because of bad practices followed by Slope. While this value isn’t massive in the industry where it has seen multi-million dollar hacks, this hack was troubling for users as the funds started to randomly disappear from their wallets.
However, every experience is a learning experience and here is what you can learn from the Solana hack.
Hardware Wallets can be a Better Choice
Hardware wallets are physical devices like USBs that are not linked to the internet and are protected using various security measures. As long as you have the device, it cannot be hacked as it is not connected to the internet. Companies such as Trezor and Ledger offer some of the best hardware wallets.
Moreover, software wallets use encryption while processing transactions and data, so if they fail to encrypt data efficiently, it can result in another Solana hack. However, this problem does not exist with hardware wallets.
Centralized Exchanges Can Save You
As the news of the Solana hack started to spread, smart users shifted their funds from Solana to a centralized exchange to avoid the worst-case scenario. While centralized exchanges manage your assets and keys privately, they are generally insured against theft and loss, providing a better sense of security for the users.
Moreover, centralized exchanges are unlikely to be hacked in a similar fashion, giving the users an alternative choice to store and handle their funds.
While the Solana hack was definitely an unfortunate situation, it goes to prove that everything comes down to the choices you make. When engaging with the cryptocurrency industry, it is important for you to stay vigilant and make smart decisions on the spot to make profits and avoid losses as well.