Cryptocurrency is growing in popularity. 46 million Americans invest in bitcoin, and that number is growing. It’s becoming a big factor in financial planning.
Like all things on the internet, you need to protect your investment against outside attacks. A type of attack that can happen when dealing with crypto is a Sybil attack.
This article will walk you through everything you need to know about Sybil attacks, how to protect yourself, and what to do if one happens.
What Is a Sybil Attack?
A Sybil attack happens when a single person attempts to take control of a network with multiple nodes, computers, or accounts that are under their control.
Blockchains make changes to their network with votes. Honest nodes will vote in a way that is best for the cryptocurrency. A Sybil node will vote in a way that will put everyone at a disadvantage except themselves.
Another Sybil attack example is a change in the flow of information. During a cryptocurrency attack, the IP addresses of individual users are at risk of exposure. This can show the attacker where you are and put other information at risk.
If a Sybil attack blockchain is big enough, it can prevent other users from doing what they want to with their cryptocurrency. Transactions can become unconfirmed or reversed, which can make you lose money.
It’s hard to know if a Sybil attack is happening until it does. Using preventative measures can help stop them before they even start.
How to Prevent Sybil Attacks
The first major way cryptocurrencies like Bitcoin try to prevent Sybil attacks is by building a chain of trust. This keeps a record of each node’s history. Rejection of nodes happens when the node tries to access or change this history. Building a chain of trust prevents suspicious nodes from spreading to other chains.
Another method is the KYC method. This has people verify their identity with selfies or a legal form of identification before they can trade. This is not as common of a solution because many users feel it violates their privacy.
A new way to protect cryptocurrency is with a collaboration between Governor Dao and Finnovant. They created a Proof-Of-Existence system. This system uses biometrics to verify a unique, individual user owns the account.
When a user logs in, they have their face scanned as they read a sentence. If information is authentic, users receive a “Proof-of-Existence” token.
The user can attach this token to their wallet forever. Developers can check this token to ensure each user is a unique, individual account.
Work Together to Prevent Sybil Attacks Today
Sybil attacks are a threat to the crypto community. Working together is the best way to prevent future attacks from happening. One of the easiest methods is the Finnovant method.
Now that you know ways to protect yourself from a Sybil attack, you can feel more comfortable investing in crypto. For more tips on how to protect yourself and make smart investments in the crypto market, keep reading CryptoRyan’s blog posts.