New Dimensions of Onchain Threats, Accelerated by AI.
Sometime in 2024 I had a Coinbase wallet on my laptop. I had created the wallet some months back, backed up and all, and just sent very little amount of $ETH to the wallet. Then in 2024 I was paid $100 for a gig which I sent to this wallet, I also sent another $650 worth of cryto as "savings". The next morning I decided to check my "savings", wallet was empty. At first I didn't believe that I was hacked, because I had some $1.50 or so worth of $ETH in the wallet for months and it was safe, so what happened? I traced the transaction history and there was the full detail of how someone sent some $ETH to the wallet, then moved out my "savings" and afterwards also took back the remaining $ETH from the one they had sent in for the attack. I checked on Twitter and saw many other posts of people who had experienced the same exploit, exactly the same pattern... and some of the people who lost their funds were experienced blockchain developers and crypto guys. I made a post about it, told my friends to avoid the wallet and tried to forget about the experience. Blockchain hit instant PMF for many, especially people in parts of the world where there are crazy high fees and bank charges. The moment people tried sending crypto and for a few cents in gas fees, there was no going back for them. The only issue has always been how to secure users' funds, desperate people will always find a way no matter how complex the UX was. After losing my savings I stopped using self custodial wallets and only used Centralized Exchanges for a while. I thought, even though that was a non-custodial wallet, the builders still should have ensured strong security and secure backups, so users don't lose funds unnecessarily. This happened to me when AI and LLMs were still at their early development stages. You can only imagine how sophiscated the attacks have gotten, now that AI and LLMs are very advanced and more capable. To put things in perspective, more than $640 million was lost to deFi hacks and