In cryptojacking, first you’re tricked into downloading and installing a fishy application on your device with hidden mining code embedded in it, and then the code is run in the background to mine cryptocurrency for a specified address. The problem with this method is that it happens without your consent, and uses the resources of your device to mine cryptocurrency for someone else.
When you are exposed to cryptojacking, the hacker does not care about the health of your device, or your network usage. They literally get free money by using your resources and device.
The fishy software which you just downloaded solves complex mathematical equations in the background, and wins cryptocurrency only to send it away to a specified address. After collecting cryptocurrency mined on many hacked devices, the hacker can actually trade that cryptocurrency for real money.
While cryptojacking has been here in one form or another ever since the creation of cryptocurrency, it has become drastically popular in the recent times.
One of the leading reasons for the rise in popularity of cryptojacking is the rapidly increasing value of cryptocurrencies these days. Another reason for this is increase in the popularity of decentralized finance applications which attract lots of investments, and pay their investors back as a reward for investing in the network.
So, all of the cryptocurrency collected by cryptojackers can also be staked on decentralized finance applications, and it is another way for those hackers to earn money. This explains the exponential growth of cryptojacking with the rise in popularity of decentralized finance applications.
However, if you do not know anything about cryptocurrency or hacking, let’s walk through some of the basic concepts explaining the crypto market, and then get back to talking about how cryptojacking is affecting the cryptocurrency market, and how you can avoid it.
In a nutshell, cryptocurrency is the digital version of money, and it is attempting to replace the traditional money we use everyday. In addition to buying cryptocurrency with regular money, users can also earn it by solving complex mathematical problems with the help of their computing machines.
Moreover, there are cryptocurrencies which can be rewarded to you just for staking in them. Staking is used in the network to provide liquidity for investors, and in return, you are the same cryptocurrency as a reward.
The first ever cryptocurrency to be ever made was Bitcoin, and today, we have thousands of cryptocurrencies available in the market. Every cryptocurrency has its own tokens, and was built to solve a specific problem which other cryptocurrencies couldn’t.
Every cryptocurrency uses a blockchain as a network to keep track of all the transactions, and ensure decentralization at the same time.
For example, Bitcoin can also be mined through the Bitcoin blockchain. Blockchains are nothing more than blocks of mathematical problems aligned together to be solved by computers in a sequence. Once a sequence of mathematical problems has been solved, it is compiled into a block and added to the chain.
The blockchain technology is always open source, and you can therefore view its code, and even use it to create your own cryptocurrency. Whenever anyone makes a transaction, it is recorded on the blockchain along with their unique user ID.
However, your real identity is never revealed on blockchain, and that is why the whole technology is termed as decentralized and private.
Let’s talk about some inefficiencies of the Bitcoin blockchain. For example, it is really hard to mine new Bitcoin because of the complexity of the mathematical problems it has. This is why the need for a new type of blockchain emerged, and thus the Ethereum blockchain was created.
While the Ethereum is also made by solving the same mathematical equations as Bitcoin, they are much less complex. This way, every transaction on the Ethereum blockchain is much faster as compared to the Bitcoin blockchain.
Many applications use Ethereum blockchain, and they are termed as dApps, or decentralized applications.
Since every transaction on the Ethereum blockchain happens without involving any third party and without exposing the identity of the engaged parties, decentralized applications use this blockchain for their functionality.
This process of transaction is very different from the traditional method, the one in which we use credit cards or a cheque to pay someone. In traditional transactions, the bank is the third party which holds your money and pays it to the other person on your behalf.
On decentralized applications, you can make smart contracts which execute themselves on completion of certain tasks by both of the parties without involvement from any third party.
Smart contracts are capable of fully replacing banks and third parties in transactions, and have lots of additional features which the traditional third parties do not have.
For example, a smart contract can be used to determine the true value of the cryptocurrency used in a transaction, and to verify if all of the mentioned conditions are met before the desired amount of cryptocurrency is released to the second party.
There are lots of different protocols on the Ethereum blockchain, and they can have their own tokens as well. These protocols and platforms allow users to use their tokens in the voting process, and decide the fate of an upgrade or feature which is planned to be added to a platform.
Moreover, some tokens or coins are made just for voting purposes, but people still buy and sell them, and this gives these tokens monetary value.
This is when we get back to cryptojacking. Just as we mentioned, even if a cryptocurrency is not made to hold monetary value, it can still hold the value because of all the trade going on. This is the main problem with cryptocurrency which gives rise to the cryptojacking problem.
These tokens are easy to create, and can even be created on mobile phones infected with mining codes under certain applications downloaded from unsafe websites. No matter how small the value in a token might be, since the cryptojacker does not have to pay any electricity bill, they are still earning money no matter how small the amount might be.
So, when a cryptojacking application is installed on your mobile or computer, the computing power of your device, and your electricity is being used by the hacker to earn money by mining tokens.
In cryptocurrency mining, users help solve complex mathematical hash which is stored in the form of blocks after getting processed. Crypto can also be earned by verifying every transaction happening on a blockchain.
The computer or mining rig used in the process solves the problem by cracking it and coming up with a password for it. It is just like guessing the password of a device; you’ll have to try every possible combination until you get it right. This is the process in which the computing power of your mining device is used.
Many people use easy passwords on their devices, and it makes their devices vulnerable to hacking attempts. That is why cryptocurrencies used very long passwords which are really complex as well. This is the main reason why your computer has to do lots of hard work to decrypt the cryptocurrency password.
Once the decryption process is done, it is done verified by other users. After the verification process is done, the person who decrypted the data is rewarded in the form of cryptocurrency. Moreover, the users verifying the decryption process are also rewarded with cryptocurrency.
So, all you need is a computer, and you will be all set to start mining cryptocurrency. If you want to mine Bitcoin, you will have to join a mining pool which is stronger than every other pool on the Bitcoin blockchain to win the rights to mine Bitcoin.
However, newer cryptocurrencies do not require computers with high computing power, and they can be easily mined by using your regular smartphone and other devices. This is the main reason why hackers cryptojack your devices and use them to mine cryptocurrency.
Cryptojacking starts by a hacker successfully injecting and installing malware on your device. The malware installed on your device then gives hacker the control over a certain portion of your device, and they use it to start mining cryptocurrency.
The whole process is so discreet that it happens in the background of your device, and you won’t notice it even for a second.
Let’s simplify the process by dividing it into some steps.
You receive a suspicious link in an email, but proceed to click on it anyway. Keep in mind that these emails look totally fine, and they can even try to impersonate someone else you receive emails from on a daily basis.
As soon as you click on the link, the malware related to crypto mining gets installed in the background, and starts to control your device.
Depending on the script and code of the malware, it might get hold of some or all of your device to start mining.
The control is so extensive that the hacker can actually see the whole process going on, and they can transfer the mined cryptocurrency to their digital wallet remotely.
In addition to traditional cryptojacking, there is drive-by cryptojacking as well.
In this type of cryptojacking, websites are used to run cryptocurrency mining scripts in the background when you open them.
The mining process lasts only as long as you are on the website. Once you leave the site, there will be no mining scripts running on your computer and using its precious computing power. Since this process happens without your permission, it is still illegal, and is termed as drive-by cryptojacking.
Whenever you visit a malicious website, it places the code on your computer. Since cookies are saved by browsers, the crypto mining process can continue to happen long after you leave a website as well.
More advanced types of cryptojacking also include viruses which penetrate into your network and find other devices to infect. This way, the cryptojacking software or code automatically increases the number of devices used to mine cryptocurrency for the hacker.
Dangers of Cryptojacking
Since the rewards of cryptojacking are great, cyber criminals are now focusing, more than ever before, on using remote computers for crypto mining. It has become so notoriously popular that it has replaced ransomware as the number one threat internet using devices these days.
Ransomware is also being used to install malicious applications and create fishy websites to use other people’s devices for crypto mining without their permission.
While cryptojacking does not directly attack the integrity of any cryptocurrency, it still is a huge problem, and no one can ignore it.
For example, companies using multiple devices at once for their daily operations can get a serious blow if their devices start being used for cryptojacking. That is because they will suffer from decreased performance, and increased electricity consumption.
So, let’s take a look at some of the biggest dangers of cryptojacking for businesses around the globe.
Cryptojacking activity usually targets smartphones, desktops and laptops. That is because the number of users unaware of the danger of cryptojacking is great, and they can be an easy target for hackers.
Once the code starts running in the background, the computing power of your device is used by the hacker to mine cryptocurrency.
The methods of cryptojacking have become so modern that they can even be used to infect applications on the Play store. This has caused the outreach of cryptojacking to increase considerably.
With cryptojacking on the rise, thousands of devices around the globe have been infected with malicious codes, and are being used to mine cryptocurrency.
Increased Electricity Usage
Cryptojacking attacks also target computers and other devices to mine cryptocurrency. Devices and their computing power isn’t the only reason why hackers attack these devices, it the free electricity than comes with them as well.
One or two personally used devices won’t use much electricity, but in companies where hundreds of computers are being used, the excessive drain of electricity can be drastically high. This can cause significantly high electricity bills, and decrease profit margins.
According to average electricity rate and consumption per computer, around $12 of electricity is used in 24 hours of background cryptojacking related mining activity. Now multiply it with the total number of computers and 30 days per month, and you’ll notice the additional electricity cost skyrocketing.
That explains why cryptojacking activities usually target large organizations rather than individuals. This way, they can just get into one system, and use its network to exploit thousands of other computers using the same network.
Unless something is done about the attack after detection, the hacker keeps enjoying the spoils in the form of free cryptocurrency.
Detection and Prevention of Cryptojacking
Cryptojacking is dangerous and damaging for devices around the globe whether in the form of an application or as drive-by cryptojacking. The later can be used to infect many websites at once, and whenever a user visits the website, the code can start running on their computer to start mining the desired cryptocurrency. It is therefore important to detect and prevent cryptojacking.
Since cryptojacking is completely hidden on your device and happens silently in the background, it can be very difficult to detect.
Here are some of the telltale signs of cryptojacking activity on your device.
If your device is heating up even in idle state, it might be suffering from cryptojacking activity. In the case of computers, you might notice the fans on your device speeding up. It is caused by croptojacking stripts constantly running in the background.
- Because of all the computing activity, the device will start to heat up more than usual.
- Quickly draining battery is another sign.
- You device might even start to crash due to the load of cryptojacking scripts running in the background.
The best way to prevent cryptojacking is to only visit trusted websites which are actively monitoring their own background activity. Even if you start to block websites which are notorious for cryptojacking, you’ll still expose yourself to one of these websites eventually.
There are also certain applications which will automatically try to block any type of cryptojacking activity whenever you visit a website. You can install an extension on your browser to automatically block cryptojacking attampts.
This was a brief overview of cryptojacking, its types, dangers, and how it can be detected and prevented.