season Crypto Security 101: Protecting Your Funds from Hackers During the Bull-Run
Peter Johnson- Jan 6, 2024
- 4 min read
I'd like to take a moment before we begin to extend my best wishes for a happy new year and to hope that this year will be more productive than in years past.
Rumors abound that this year marks the start of the bull run, promising a wealth of money making opportunities. While this may be true, an aspect that is often overlooked is the increase of scams in a bull run. Such scams are becoming increasingly sophisticated and present as legitimate opportunities for even crypto experts to fall prey to. As an example, a friend recently lost $6000 in an attempt to claim something he was eligible for, due to a phishing link. I too have been taken in by this sort of scam previously and can attest to its effects.
To prevent fraudulent activities like this, we must adjust and switch up our attitude towards security issues. Consequently, I did research and developed a new approach to guard our finances. It is called ACCOUNT ABSTRACTION.?
What is the definition of "Account Abstraction"?
To comprehend account abstraction properly, it is vital to get to grips with the current cryptocurrency account environment.
There are essentially two varieties of accounts in the crypto world: are accounts created by humans and managed by private keys.
EOAs are accounts created by people and managed through private keys.
Two contracts are available.
External Owned Accounts, also known as EOAs, are accounts that are not controlled by any smart contract. They are operated and managed by users, and only the user holds the keys to the account. EOAs allow users to store Ether and other digital tokens on the public blockchain.
Accounts that are controlled by private keys (a series of random numbers and letters) and mnemonics (a series of twelve or twenty-four random words) are operated by everyday users like you and me. Examples of such EOAs are Metamask and the Official SafePal Wallet, among others..
One of the main benefits of using an EOA is its ease of use for everyday users. By using the private key or mnemonic as their verification, they can send transactions, interact with smart contracts, and manage their crypto assets on the blockchain. However, the downside is the lack of security, as many users may not be aware of the phrase “not your keys, not your coins” – meaning, if the private key or mnemonic is lost, the associated funds are also lost, and cannot be recovered.
Agreement Accounts are accounts that are set up per contract. They enable the tracking of financial transactions related to any given contract.
Accounts set up per contract are referred to as Agreement Accounts. These accounts enable the tracking of financial transactions that are connected to the contract.
Contract accounts, otherwise known as smart contracts, are accounts that are controlled by code and deployed onto the blockchain. Unlike EOAs (Externally Owned Accounts), they do not have any associated private keys, and are instead governed by the logic defined by the code they consist of.
EOAs and contract accounts both have individualized addresses that can store digital currency tokens. Balances and transactions for both of these accounts are handled and updated in compliance with the instructions of the code.
Put another way, the account can not be tampered with, making it safer than EOAs since contract addresses are not based on trust and can act autonomously.
Setting up contract addresses can be a difficult process, as it requires one to have a working knowledge of code.
This article will detail the process of account abstraction.
Account abstraction was developed to simplify the conversion of an EOA (Externally Owned Account) into a contract address. This mechanism facilitates the setting of custom transaction validation rules for crypto wallets.
Rather than observing the standard “send and authorize” method, transaction processing through account abstraction allows us (users) to set conditions that must be fulfilled before a transaction is approved. This then allows our normal wallets to operate as if they were smart contracts.
Say, for example, hackers were to gain access to your wallet; even if they managed to click send, the transaction wouldn't go through as you have specified other conditions that need to be satisfied for any payments to be approved.
The conditions established could be as arbitrary as desired, and there are no restrictions on what these can be. For example, you could specify that prior to any assets being moved from your wallet, your mom's maiden name should be entered into the prompt, or you could set that coins can only be transferred between 8am and 3pm. There is no boundary to the level of randomness you could apply for account security.
By taking this step, the hacker is disheartened and leaves without gaining any assets. In turn, that ensures the security of yours.
If you experience loss of access to your funds, such as losing your private key or mnemonics, account abstraction makes it possible to create recovery processes that will allow you to regain control of your account.
Consequently, account abstraction presents limitless opportunities for bolstering the security of your possessions as a hacker can't surmise what you had for your evening meal on a particular day or which top you like most since they are not omniscient and you haven't shared the information with anyone else.
The use of account abstraction can be taken advantage of., and Optimistic Rollups.
In the recent past, there has been an emergence of a variety of layer 2 platforms. These include Starknet, zkSync, and Optimistic Rollups.
To gain a better understanding of layers of the cryptocurrency world, take a look at Cryptowraith's Twitter thread.
These layer 2 chains have pushed the boundary of account abstraction, guaranteeing a smooth experience when protecting your account. Developed specifically with the security of the user in mind, wallets such as Argent wallet and Safe Protocol are prime examples of this.
These wallets enable you to customize your security settings to fit your needs.
To sum up, account abstraction provides a way for you to protect your possessions, allowing you to establish terms that fit your specific requirements.
If you found this blog helpful, why not follow it and spread the word? Sharing it with your friends and peers could also prove to be of great benefit to them.
Sincerely, Cryptowraith.
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