A 51% attack occurs when a single entity or group of individuals controls more than 50% of the validating power or mining hash rate on a network. In such cases, the controlling entity can manipulate transactions, double-spend coins, and potentially disrupt the blockchains' operations.
A cold wallet, also known as cold storage, refers to an offline wallet that is not connected to the internet. It provides a high level of security because it is not susceptible to online attacks. Cold wallets are typically hardware devices, such as Ledger or Trezor, which store private keys and allow users to securely manage their cryptocurrencies. They are similar to USB sticks and often require physical interaction to sign transactions.
A hot wallet, or hot storage, is a cryptocurrency wallet that is connected to the internet and accessible for regular transactions. Hot wallets are convenient for frequent use and quick access to funds but have a higher security risk compared to cold storage. Examples of hot wallets include software wallets like MetaMask, Trust Wallet, and WalletConnect. These wallets are often used for day-to-day transactions and interact with decentralized applications (DApps) on the blockchain.
A multi-signature wallet, or multiSig, is a type of cryptocurrency wallet that requires multiple signatures or keys to authorize transactions. It enhances security and mitigates the risk of a single point of failure. In a multiSig wallet, a predetermined number of signatures, typically a majority, is required to approve a transaction. For example, if a wallet requires 3 signatures and there are 5 key holders, at least 3 of the 5 key holders must provide their signatures to initiate a transaction. MultiSig wallets are commonly used for shared accounts, corporate wallets, or community-managed funds.
A reentrancy attack is a type of vulnerability that can occur in smart contracts. It involves an attacker exploiting a flaw in a contract's logic that allows them to repeatedly call back into the same contract before the previous call completes. By doing so, the attacker can manipulate the contract's state and potentially drain its funds or cause unintended behavior.
The reentrancy attack gained attention with the infamous DAO Hack in 2016 on the Ethereum blockchain. Solidity, the programming language used for Ethereum smart contracts, has since implemented measures to prevent reentrancy attacks, and developers are encouraged to follow secure coding practices to mitigate this risk.
Updated 7 months ago