What do people mean when they talk about "hackers gaining access to our network" (at home)?

Question

Have I fundamentally missed something between the time when I sat with my 486 IBM PC in the house, fully offline, and today? Do normal people actually set up complex local networks in their homes where they have some kind of "trust anyone with an internal IP address" security scheme going on?

What does "gaining access" to a home network mean? Is that, like, exploiting the NAT router (if such a thing is used, which has not always been the case for me)? Even if they exploit the router, that doesn't magically give them any "access" to the "network" (meaning PCs connected to the router)? At best, they can maybe read plaintext traffic, but how much such is there these days? I shall hope 0% of all traffic.

So what do people mean when they talk about "gaining access"? No updated version of Windows has ever just allowed somebody to randomly connect remotely to "gain access", regardless of the presence/absence of a router/switch/whatever in between. Or, if it has, that's some kind of "0-day" exploit or unknown-to-the-public exploit. The so-called "hackers" that people talk about more than likely never "gain access" like that at all; I bet it's 100% social engineering and tricking them into running coolgame.exe as sent to them in an e-mail attachment and things like that.

My intention with this question is to understand people and the world. I'm genuinely wondering about this since not a day goes by without me feeling extremely paranoid about security and privacy, especially knowing how incredibly naive I used to be, and how naive people in general seem to perpetually be about these things.

Answer 1

Do normal people actually set up complex local networks in their homes where they have some kind of "trust anyone with an internal IP address" security scheme going on?

They do. Many have a PC or notebook, mobile phone, a printer, smart speaker (Alexa etc), SmartTV, IP camera for surveillance, smart home devices ... and these are typically all connected to the same router. Especially the cheaper devices are often vulnerable enough so that they can be hacked and recruited to be part of a botnet, see Mirai.

Routers are often vulnerable too. If these get hacked they allow an attacker not only to be part of a botnet but to intercept and change traffic. With luck one will only get lots of advertisements on your computer but links you click might also lead to phishing sites or downloads might be replaced with malware in transit.

And devices in the same LAN are usually configured to trust each other. Windows ask for the type of network and if private network is configured it will share folders to other systems in the same network etc and thus also to an attacker located on one of these systems.

At best, they can maybe read plaintext traffic, but how much such is there these days? I shall hope 0% of all traffic.

If you look at "HTTPS usage in Chrome worldwide" in the Google transparency report you'll see that about 90% of the traffic is currently encrypted in western countries but that it might be much different in other areas, like currently only around 75% in Indonesia. And this is amount of traffic, not number of different websites. Especially many of the smaller sites are still HTTP only.

And this is for internet facing traffic only. Most traffic in the LAN itself (like Windows file sharing) is still not encrypted.