What is the replay attack? Possible impacts on your Ethereum NFTs and precaution | cryptopolitan
- Susan G. Hall
- 0
- on Aug 17, 2022
The second-largest Ethereum blockchain is now weeks away from the long-awaited merger. The next update marks the blockchain’s complete transition from proof-of-work (PoW) to proof-of-stake (PoS). This is undoubtedly one of the biggest steps to take in the cryptocurrency space, given that Ethereum is among the largest and most pioneering PoW blockchains.
Many Ethereum crypto users, holders, and enthusiasts are excited about the merger in September, as it will potentially improve the overall scalability of the network, among other relevant functions. Amid the euphoria, there have been arguments and speculation about the possible fundamental and technical implications of the upcoming merger with the Beacon Chain.
One of the most discussed outcomes of the event is Replay Attack. In this article, we explain what a replay attack means and how you can secure your NFTs.
What is a Replay Attack?
A replay attack is commonly referred to as a man-in-the-middle attack. This arrived when a hacker or malicious actor connects, intercepts and secretly modifies data on a secure network so that the data/transactions are delayed or repeated to the detriment of the author. Replay attacks can also occur in the blockchain space, especially during chain splits or hard forks.
After the merger, there would be two working chains/copies of the Ethereum blockchain – and Ethereum PoS (new chain) and Ethereum PoW (old chain). Due to these chain splits, assets in the current Ethereum network, including non-fungible tokens, will be duplicated in the PoS chain. This means that the NFTs you currently hold will be duplicated, which consequently opens up the chances of a Replay attack.
How?
Assuming the old Ethereum PoW thrives with miner support and the new ChainID, transactions on the PoW chain may be replicated or replayed on the new Ethereum PoS blockchain, which is risky and may result in loss of assets.
“If you send 100 ETHPoW on your wallet POW chain to a friend, then your friend could broadcast the same transaction in the POS chain and send themselves 100 original ETH to their same wallet,” said a DeFi expert.
NFTs are also vulnerable to such an attack. The transaction attributes of a duplicate NFT on the Ethereum PoW can be replayed on the PoS chain, allowing the malicious actor to claim the primary asset on the Ethereum PoS network. Replay attacks on Ethereum assets could wreak havoc on the crypto market, although many experts believe the odds are slim based on predictions that EthPoW may not survive for long.
The best will be to mitigate your exposure to such an attack if you currently hold an Ethereum asset.
Precaution against possible Ethereum Replay attacks
Here are some of the ways you can mitigate the risk of replay attacks and protect your assets on PoS and PoW Ethereum blockchains
Use different wallets for PoW and PoS
The possibility of being attacked by Replay is much higher if you leave or exchange the assets – NFTs or duplicate tokens – in a single wallet. You need to create and use different wallets for each channel.
- Create two wallets (B) and (C). Transfer all your assets from main wallet (A) to wallet B just before the merger.
- After merging, you can transfer all assets from Wallet “B” to Main Wallet (A) for the PoS chain.
- Next, transfer all PoW assets from wallet “B” to “C”, the latter becomes your main wallet for trading on the PoW chain.
The idea is not to have/use the assets in one wallet.
Another option to prevent replay attacks would be to mess up transaction announcements, which could be technical.
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