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If you’re thinking about jumping on the Bitcoin bandwagon, security-related issues are likely to be at the top of your list of concerns. Fortunately, the Bitcoin network doesn't have much vulnerability if there is a user error worthy of mention.
In this article, we’ll talk about the history of Bitcoin security, where it stands today and the risks of being hacked. We’ll also discuss strategies. Bitcoin users can employ to protect their payments.
Has There Ever Been a Bitcoin Hacking?
Let’s start by saying that it's incredibly difficult to hack the Bitcoin network. However, there is always the risk that bitcoins might be stolen from a wallet on a cryptocurrency exchange platform.
It’s important to reiterate that these risks are minuscule – but not non-existent. The Bitcoin network has been around since 2009, and since then, it has never been hacked.
We’re talking about the network in its entirety, of course. There have been instances where specific wallets were hacked, but never the network itself.
What Makes Bitcoin so Difficult to Hack?
A failure in one section of the Bitcoin network doesn’t have an impact on the entire system. This is due to the decentralized and distributed nature of Bitcoin.
If someone were to hack the Bitcoin network, they would have to simultaneously attack the entire system and use many different entry points.
This is virtually impossible and has never been accomplished before. Blockchain security is at such a high level; it’s one of the safest and most viable options for users worldwide.
Nodes, a form of the blockchain infrastructure, are in charge of broadcasting messages across the network, ensuring that all transactions within the system are secure.
Nodes are also responsible for making sure that a digital token is only used one time. There are countless nodes, all of which are randomly generated, making hacking them nigh on impossible.
Mining and hashing are other reasons why Bitcoin can’t be hacked. Hashing is the process of enabling security when a transaction takes place between two users.
An algorithm automatically generates a unique hash which in return protects the message from any tampering.
Bitcoin mining is about solving highly complex mathematical problems. Once a single problem is solved, the blockchain receives new blocks.
However, before they’re added to the blockchain, nodes must first agree that they’re safe. Only then are they added to the Bitcoin ledger.
In Theory, How Would Bitcoin Be Hacked?
We’ve established that hacking Bitcoin is virtually impossible. But in purely hypothetical terms, could it be done? In theory, the network could be jeopardized by something called a 51% attack.
The name comes from the notion that a hacker would need to utilize 51% of all the computers involved with Bitcoin to complete the hack successfully. The hacker would also have to control the majority of the mining power inside the network.
If they were to succeed, they could change the Bitcoin transaction history. However, gaining control of that many computers and so much mining power is almost unfeasible and highly unlikely to happen.
How Do People Lose Bitcoin?
While the Bitcoin network is safe from any hacks, it’s a different story regarding daily transactions and Bitcoin users. But how does any cryptocurrency get stolen? There are several ways this happens. Cybercriminals tend to hack the Bitcoin trading platforms directly.
Their goal is to get the Application Programming Interface (API) keys and use them to access the system. Once they do, they install bots that withdraw funds from users' accounts or be involved in fraudulent trading.
Another way someone might steal your bitcoins is via third-party trading applications. If users leave their personal information behind, they could be at risk.
Finally, a common problem that can lead to you losing your bitcoins is phishing. There are many misleading, professional-looking websites and emails set up to steal user credentials.
How to Make Sure No One Steals Your Bitcoin?
The Bitcoin network is safe, and there are no concerns regarding a large-scale hack attack. Even if Bitcoin mining ceased right now, buying and selling your coins would still be an option.
However, individual users could still see bitcoins drained from their wallets. But how do Bitcoin traders leave themselves vulnerable to hacking, and what can they do to prevent it?
Choosing the Right Online Service
This should be your top priority. Choosing a safe and secure Bitcoin wallet like Bitamp will spare you lots of headaches. You should focus on finding the crypto wallet that fits your trading and storage needs.
Always Backup Your Bitcoin Wallet
When you store the wallet safely, it protects your computer from any potential failures or human errors. Also, make sure to encrypt online backups, as they are notoriously vulnerable to theft. Furthermore, using several secure locations instead of a single point of entry is a much better choice.
It might seem like redundant advice, but it’s always worth repeating. Your password should be as strong as possible – and make sure you never forget it.
Especially as there are very few password recovery options when it comes to Bitcoin. Take extra steps to ensure you always have the correct password. Write it down on a piece of paper if necessary.
Enjoy Safe Bitcoin Trading
When it comes to Bitcoin security, the burden is very much on the user to ensure their coins remain exactly where they are. That’s why it's essential to choose a Bitcoin wallet that can provide a service that gives you peace of mind.
The biggest security risks regarding Bitcoin are these types of cybercriminal activities. They can be a significant inconvenience for individual users, but they don’t put the entire Bitcoin network at risk.
The Bitcoin system is impossible to penetrate, and no one has even made such an attempt before. Granted, as the network grows, other security risks might emerge, but new ways of protecting it will as well.
Hitesh is a digital marketing strategist and entrepreneur with more than 15 years of experience in digital marketing, start-ups, branding, and customer acquisition strategies. Hitesh is the CEO and Founder of Reposition Group , which specializes in digital growth strategies for companies in the cryptocurrency market, such as Bitamp.com.