What is $5 wrench attack and Bitcoin stack? If you want to keep your Bitcoin stack safe and intact, you will need to prevent your holdings, in fact your wallet, from all kinds of attacks.
One such attack you need to know about is the most fabled $5 wrench attack. However, most people seem to be unaware of this attack and its potential and this is why this article is worth reading.
Ideally, these attacks are made by those malicious actors who believe that you are the only one who has the possession of the private keys.
These keys are one of the most important elements that will keep your holdings safe and let you maintain your ownership of the coins.
People behind such attacks, unfortunately, know where you live and they visit you to force you physically to hand them your Bitcoin stack over.
They may even press you to swap cache or take your hardware pockets out.
It does not matter how this attack may happen.
It may be caused by data breach among the customers or your poor operational safety practices, or any other reasons whatsoever.
It is important to prevent such things from happening.
In order to ensure that nothing unfortunate happens to you, it is therefore important that you know what a $5 wrench attack is and the ways in which you can save your Bitcoin stack.
This article will not only let you know about the attack in particular but also propose a set of solutions which will enhance the physical security of your virtual coins.
What is $5 Wrench Attack and Bitcoin Stack?
However, it is all up to you to save your keys and crypto because no one will come to your rescue if you give in to such threats.
You will lose everything, even if it is not a fair thing to happen.
For that reason, it is extremely important that you do exactly what Uncle Jim asked you to do such as:
- Use only a hardware wallet
- Write down your seed word and
- Take custody of your Bitcoin.
However, you may have missed out on one important point which is: with radical freedom comes radical responsibility.
If you did, now is the right time to know it, implement it, and internalize it. Period!
It is very important for you, and for all crypto owners for that matter, to treat their crypto coins, especially Bitcoin, like its value is ten times more than what it is actually now.
Rest assured it will actually be very soon.
If you still do not want to realize the importance of protecting your Bitcoin wallet and crypto, you can be vulnerable to a $5 wrench attack.
What is$5 Wrench Attack?
Now you must surely want to know what a $5 wrench attack is.
It is good because before you dive deeper into it, you should know a little bit about the background of the $5 wrench attack.
It is quite simple actually. It is basically the process of coercing a Bitcoin owner to hand the seed phrase over to the criminals.
Yes, they are criminals in the true sense because in the crypto community, no matter whoever it is, no one will ask you to hand over your private keys.
Also, if you are a Bitcoin owner and have been in this space for just even a couple of months you must know by now that there are actually no take backs on the Bitcoin network.
A $5 wrench attack is a hypothetical situation and can only happen if someone somehow comes to know that you own a lot of satoshis and threaten you to hand over the coins, passwords, and mnemonics.
Now you may wonder, what could be the effective solutions to protect your wallet and crypto.
Well, there are several options available that can prevent these home invasion incidents.
However, all these options come with their significant pros and cons which you should also keep in your mind while choosing an option to protect you and your coins against $5 wrench attacks.
None of these options are mutually exclusive however. Therefore, do your research and know your needs and preferences before choosing a solution.
Remember, what may be suitable for some users may not be a good fit for you since your needs may be different.
However, do not be late to implement any of these security solutions for your Bitcoin stack.
Sooner you do it, the better because it will discourage the crooks from attempting a $5 wrench attack on you.
If you do not want to get hurt, both physically and financially, you should spend some time on damage control first.
You should always maintain a low profile and not advertise too much about your holdings.
However, if you have done otherwise, now is the time to convince others that you have far less Bitcoin than you actually do.
Ideally, this is the first way in which you can trick such attackers.
The second most important thing to do is to keep your wealth in separate places. The best option is using multiple hardware wallets.
These wallets are pretty safe and will also allow you to move around with your wealth in your pocket.
The good thing about using different hardware wallets is that when you do so you will have different passphrases to access the different accounts.
Though this option may be a bit expensive one, it is quite an effective one.
This will surely sow down and even discourage the attackers since they will need multiple seed words and authorizations.
This will add to the security level significantly apart from other safety and security measures related to the hardware, software, and the physical locations.
Here are some other proven solutions to protect you and your bitcoin stack from a $5 wrench attack.
You can use a decoy wallet in which you may load the number of coins that you can afford to lose and that much amount that will satisfy a thief.
However, remember that you should never load so much that you may not be willing to forgo during an emergency.
Most Bitcoin users typically have a hot wallet where they store a limited number of coins which they use to make their daily transactions.
Ideally, the number should be enough to send a message to the attackers that you owe some Bitcoin but it should not be an amount that can crush you financially in case you lose them all.
A mobile wallet could be a nice decoy wallet to have. You must ensure that the attacker does not have much or more specific information regarding your Bitcoin stack.
Assuming that the attacker gets some information being more technically savvy from a customer data leak from a particular manufacturer of a hardware wallet, they may come to your home to find it.
In such a situation, a decoy wallet may be a bonus to them which they would hardly expect.
There are also a few specific types of wallets that come with a unique duress PIN attribute.
This feature will be a great help in such situations because you can create separate wallets within the same device that may be consequential to the similar BIP 39 seed phrase.
Therefore, one can be the decoy wallet and the other the main wallet for storing your crypto.
The attacker will not be able to know it without knowing the PINs.
You should also upgrade your home security as a smart option.
This will not only save your hardware wallet from being stolen but also other assets in your home and this does not mean locking the doors and windows when you are at home or away.
Do not keep the keys to the doors for others to use it in places that are very common and known.
Remember, your hiding place is not better or different from those of the others.
The home invaders will check every nook and corner of your home.
You may consider using surveillance systems instead. They may be costly but are worth the investment.
Though these considerations cannot guarantee that your hardware wallet along with the private keys to your Bitcoin account will not be stolen, it will surely make you a much more challenging or a difficult target, which is always a superior idea.
Though it may be leaving a bit too much to chance, this is one of the most basic aspects of the best possible solution towards protecting your wallet and Bitcoin from $5 wrench attacks.
This is especially when you value your Bitcoin 10 times more than what it is.
In this process, you simply have to set up the hardware wallet and create a proper backup of the BIP 39 seed phrase.
If none of the two are in your home, there is hardly any chance of you being coerced during such a home invasion to hand over your Bitcoin by signing a transaction.
It will also not allow the attackers from laying their hands on your seed phrase and use it to send your Bitcoin to their wallet.
However, this process may create some significant difficulty in spending your Bitcoin but then protecting your Bitcoin holdings for $5 wrench attack is the primary idea.
Since these cold storages are not meant to be used for spending, this friction aspect can be considered as a useful feature and not as a bug.
Now, you may ask what if the attackers force you in their car and take you to the place where you stored the backup or the key signing device.
Yes, this can happen if the crook is very much motivated.
However, if they are willing to go for a ride, take them (all puns intended). Ideally, in such a situation, such inconvenience would not be a detriment, really.
This is because, during the trip, you may take them through several security checkpoints which will then become the key factor to foil their intention.
These security checkpoints between you and the access to your backup or key signing devices could be anything and of any form such as:
- The safety deposit box of your bank
- A safe in your office that has 24/7 security and surveillance or
- A trusted friend or a family member who stays home always.
No matter whichever option you choose, each of these checkpoints can prove to be a point where you can express your threats and get help or something can be arranged to get you out of the coercive situation.
There are several good reasons to follow this process. Some of the benefits of geographic separation are:
- It will take a long time for the attackers to execute an attack and therefore there is a high chance of them getting caught.
- It will also increase the physical risk for the attackers because there is a lot of difference between a simple home invasion in-and-out and kidnapping and ferrying someone around to several locations which is bound to raise a lot of suspicion in others.
- If you store your signing devices in a place that is open only during the business hours, such as your office or a bank, it will give limited time to access them. This will reduce the effectiveness and chances of nighttime attacks.
Also, if you store your keys in locations that are not so obvious it will provide more privacy and make it hard for the attacker to compromise several keys simultaneously.
This is because they will first have to force you to reveal those locations.
This will put a huge barrier in planning out such an operation without having the proper and prior knowledge of the security aspects of those places where your keys are stored.
However, there is a specific level of trust required in all these strategies, and this is quite contradictory because trust is something that is not really approved or followed in the crypto space.
In a way, there is very little you can do to surmount such inadequacies.
For example, if you store them in the safe deposit box in a bank, there is a high chance that the devices will not be compromised but then there is no guarantee to it.
These safety deposit boxes come only with a ‘sacred’ tag but this promise is really not worth your fortune.
Also, when you store the keys in your office with surveillance around the clock, there is no guarantee either.
Even the cleaning crew in the evening may happen to find your backups and you will be out of luck if they know that this is the most important Bitcoin BIP 39 seed phrase.
And, the same is applicable if the trusted friend or family member invites a lot of guests in their homes where your secrets are.
It is for this reason it is necessary to ensure that the key holders enforce some specific processes such as:
- Using response expressions as soft validation
- Using duress phrases as duress reactions that are not very obvious and
- Implementing video conference requirements.
And even the tamper resistant or tamper evident bags may be completely worthless even if it will discourage snooping around.
Once it is breached, there will be no stopping the crook, literally.
Assuming that you have multiple seed phrases that are stored safely and geographically distributed, you can link them all into one multi-signature wallet.
In such a situation, you will need to collect at least two of these three devices if you want to sign a Bitcoin transaction.
If these wallets are of the ‘m of n’ standard, you will then need to sign it with a minimum number of the signing devices if you want to move your holdings.
This will result in friction which will not be much of an issue for you but will surely cause some inconvenience for the $5 wrench attacker.
In such a situation, you may even keep one of the devices in your home.
This will still need the attacker to pass through one of the checkpoints mentioned above.
Add to that, if any one of the hidden secrets is compromised, you will not have anything to worry because you will still have total control over your Bitcoin holding through the other two devices.
Once again, a tamper-evident bag will be a prudent and an economical addition to this strategy.
However, this is also not a completely foolproof option and is best in theory.
This is because, as of now, unfortunately the tools available make it technically hard for the Bitcoin users to pull this strategy off, until they are ready.
However, the key here is – until one is ready. If you are okay with the learning curve then this type of security option which is seemingly aspirational now for most of the Bitcoin users may be utterly critical.
This will ensure that you have a safer and healthier future when Bitcoin becomes the primary unit of account, store of value, and a method of exchange.
This is because the multi-signature savings accounts will deter the attackers from attacking any one Bitcoin holder since the chances of success will be reduced significantly.
This may then become the standard in the future and ensure Bitcoin becomes the most practical global standard when it comes to security of personal wallets.
Time locking the coins is a very good digital option. This will make the funds, even if the keys are stolen, un-spendable.
Though this is a more technical and a bit complicated approach, your coins will be saved from being moved when the keys are compromised until the set date expires.
However, it may not give the same protections as slowing down the $5 wrench attacker would.
Though this process will give the attacker some more time to think about the attack and collect more keys, there are three specific scenarios this approach will put you in.
- One, the attacker does not have enough key and therefore you move your funds.
- Two, both you and the attacker have enough keys and therefore in an impasse and hence may have to parley a payoff by sending back and forth partly signed transactions.
- Three, both of you have enough keys and both broadcast replace-by-fee transactions so that you can spend the coins as and when the network allows you to do it.
Ideally, you will find yourself in a race to the bottom where one is willing to burn large amounts of money to pay for the transaction fees.
In such a situation, it is better to negotiate a payoff by signing back and forth transactions partially.
Dedicated Hardware Devices:
This will give the final layer of security to your crypto keys.
Even if an attacker manages to compromise the standard physical security, it will be hard to simply walk away with the seed phrase as compared to storing them in clear text backups such as a paper wallet.
The hardware devices usually have a numeric PIN to protect your seed phrase against theft.
This adds another layer to the physical security because an attacker cannot have access to the private keys stored inside it because having physical possession of the hardware device will not be enough for that matter.
Moreover, the hardware wallets will wipe automatically when one makes a specific number of PIN attempts, incorrectly.
Therefore, it will protect your keys and wallet from an attacker brute forcing the PIN.
This will give a lot of confidence because the attacker will need to use a fair amount of cleverness and sophistication in order to pull it off.
To sum up, the main intention should be preventing immediate access to your private keys so that you can prevent $5 wrench attacks.
Use multiple layers of security and also make the attack costlier and more difficult to carry out by using multi-signature accounts, separating the keys, and implementing stronger physical and digital security processes.
Wrench attacks may be a worrying event to happen but it is imperative for you to know about it and sustain security.
If you know the risk you can find ways to mitigate it by yourself. If you cannot, this article must have helped you a lot for sure.
I have special interest in crypto and intend to help common people to gain knowledge about the digital asset as well as its potential. Follow Me at Linkedin.