Bitcoin Blockchain Security
Bitcoin Get Shut Down: What is a 51% Attack?
Can Bitcoin Be Stolen?
FAQ on Bitcoin Security
Are you a new Bitcoin investor worried about the safety of your cryptocurrency holdings? Or an existing investor that suddenly has concerns about Bitcoin being a safe investment to hold long-term? Either way, we will address your concerns. We will discuss the possibility of hackers stealing your Bitcoin. And the chances of a government shutting down the entire Bitcoin network.
Firstly, what is Bitcoin? Bitcoin is a decentralized cryptocurrency that launched in 2008 on a blockchain. No government, group, or individual controls or regulates the transactions of its users. Over time, Bitcoin has grown in popularity and attracted a lot of investors from all over the world. In 2021, investments and demand for the cryptocurrency drove it to an all-time high price of over $60,000.
Many people in the tech community consider a Bitcoin hack on blockchain to be near impossible. This is because of how secure the technology is. Blockchain is under constant review by Bitcoin holders, making it almost hack-proof. However, there have been reports of vulnerabilities in the network in recent years, leading investors worldwide to ask, “can Bitcoin be hacked?”.
Bitcoin is mainly stored on digital wallets. These digital wallets keep the private keys (passwords) to your cryptocurrency holdings safe. They let you trade your Bitcoin with other people through peer-to-peer transactions.
Digital wallets store Bitcoin differently than a physical wallet stores fiat currency. This is because the blockchain holds all Bitcoin, and you can only access your share with a private key. You need these private keys to prove you are the owner of your share of Bitcoin. If you lose them, your Bitcoin is gone forever. Fortunately, digital wallets can help you preserve those keys.
There are three types of Bitcoin wallets, and they offer different degrees of security.
This is when you write your private keys on a piece of paper and safely keep them. It is the safest storage means, but it renders your Bitcoin untradeable. This is until you put it back on the internet.
Can cryptocurrency be hacked in a paper wallet? No, they can’t be hacked unless the hackers somehow get the paper on which you wrote your private keys.
Here, you store your Bitcoin in a USB drive. Then, you have to connect it to a computer when you want to trade it for fiat currency or an altcoin. SecuX is one of such wallets. It provides a mix of security and convenience.
People have a common question: "has Bitcoin been hacked on a hardware wallet?”. Fortunately, there is no reported case of a hardware wallet hack. The thieves need to figure out the password to the USB drive before they can access it. This is why Bitcoin stored on SecuX is safe. The hardware wallet has top-notch security features that prevent hacks.
Also read: Hardware Wallet vs. Software Wallet: Which Should you Prefer?
This is when you store your Bitcoin on an exchange platform. It is the most popular form of crypto storage and is the medium most prone to a Bitcoin hack.
Users trade Bitcoin through peer-to-peer transactions on exchanges like ATAIX. This is because it is decentralized and traditional banks cannot control it. However, this dependence on exchange platforms has made people wonder, “can you hack Bitcoin exchanges?”. Unfortunately, the answer is yes. Although challenging, hackers can break into a Bitcoin exchange. Especially if proper cybersecurity measures are not taken to safeguard it.
The security of the blockchain itself is firm. Hackers have been trying relentlessly to infiltrate it, but they have never succeeded. Thieves have found their way into Bitcoin wallets, though. They do this by tricking investors and getting a hold of their private keys. Some have even successfully hacked crypto exchanges like crypto.com. But, you should be more concerned about someone getting your private keys. This is easier for thieves than hacking the Bitcoin network.
Is Bitcoin hackable on the blockchain? The answer is, fortunately, no, partly because of the transparency of the network. Every transaction that occurs on the blockchain is visible to the public. And these transactions are under constant scrutiny.
Before you can add a new block to the blockchain ledger, you have to solve complex math problems. This is a process called mining. The cryptographic hash function of Bitcoin develops the math problems.
Mining takes time, consumes a lot of power, and only produces worthwhile results when done for a long time. Also, the nature of blockchain means hackers can't duplicate Bitcoin.
The Bitcoin blockchain is stored on nodes in a computer network that spans the entire world. It is hard for any hacker to change any information on a blockchain. This is because they would have to hack more than half of all the computers in the network simultaneously. Their effort would be futile if they could not pull that off.
A 51% attack is when a hacker takes control of more than half of the computer networks hosting blockchain. The fact that it is almost possible to pull this off makes Bitcoin safe on a blockchain. But, if someone succeeds at this, they can alter Bitcoin’s transaction history.
Has Bitcoin ever been hacked by a 51% attack? Well, the answer is no. Nobody has controlled more than half of Bitcoin’s network at once. And it is unlikely that anyone ever will.
Can Bitcoin be shut down? This has never happened since it was launched. It is also unlikely to happen in the future because it is decentralized, and no government can take it down. Still, it can be theoretically shut down. If somehow all the computer systems in the network lose power or internet connection. This will sever the connection the nodes in the network have with one another.
Can Bitcoin be stolen? Yes, hackers can steal Bitcoin, as mentioned earlier. This theft would likely happen during a cyberattack on an exchange platform. For example, crypto.com was hacked in January 2022. The perpetrators stole Bitcoin worth over $30 million. This is why you should be careful while investing. Look out for fast and secure crypto exchanges like ATAIX. They will help keep your Bitcoin safe and secure.
Furthermore, thieves can trick Bitcoin holders into sending them Bitcoin. One such scheme happened in July 2020. A boy hacked the Twitter accounts of celebrities like Elon Musk, Barack Obama, and Kanye West. The teenager asked users to send $1,000 to a Bitcoin wallet through those accounts. He promised to give them $2,000 in return. Unfortunately, he could steal a total of $117,000 worth of Bitcoin using this ploy.
Can Bitcoin be hacked from a user’s wallet? Yes, you can suffer a Bitcoin hack from your wallet if your private keys are leaked. To prevent this, do not tell anyone the password to your wallets and look out for phishing scams.
Billions of dollars’ worth of crypto have been stolen every year since its invention. In fact, $1.7 billion, $4.5 million, and $1.9 billion worth of crypto were stolen in 2018, 2019, and 2020 respectively. This indicates that there is a chance that your Bitcoin can be stolen too. That is if you do not take the necessary safety precautions.
This is because some people don't safeguard their private keys from hackers. Some exchange platforms do not take the necessary security steps to keep hackers away.
Yes, Bitcoin theft is illegal. If law enforcement catches the perpetrator, they will arrest them. They will likely be charged with fraud and grand theft for the cybercrime. But, most governments do not have preventive regulations against cryptocurrency yet.
No government, group, or single individual has proven to be able to destroy Bitcoin.
This can only be done through a 51% attack that no one has succeeded.
Crypto developed on the blockchain cannot be hacked. But, hackers can target digital wallets and exchanges holding crypto.
Your crypto wallet can be hacked if your private keys are leaked.
More than half of the nodes supporting blockchain have to agree that an alteration is valid. Thus, nothing will happen if a hacker cannot successfully carry out a 51% attack when they try to hack.
Generally, Bitcoin is a safe asset. It has never been shut down, even for a second. It is also unlikely that a hacker would steal directly from your Bitcoin wallet. That is if you safely keep your private keys from prying eyes. The big challenge would be avoiding exchanges that are prone to attacks. Platforms like ATAIX are good places to store your crypto. Lastly, blockchain is very difficult to hack. So, you should not worry about it.