Wednesday, September 18, 2019

Can Bitcoins Be Stolen and How?

If you’ve been following cryptocurrency news, you surely have heard about the $65 million hacking attack that happened back in July, 2016. It was said to be the second-largest heist of cryptocurrency and the victim was the Bitfinex trading platform. Such a huge sum of money stolen from a reputed Bitcoin exchange puts a big question mark on the integrity and effectiveness of the multi-signature blockchain technology and the level of security that such cryptocurrency exchanges are using to protect the digital assets of their users.
Different Types of Digital Threats Targeting Bitcoin

Several incidents, like the Bitfinex hacking attack, has happened since the inception of Bitcoin, and most people wonder how such a secure technology can be breached. Well, there is a variety of incidents stealing Bitcoins and other cryptocurrencies. In fact, according to a study published by Dell’s SecureWorks division, about 150 breeds of malware are lingering in the digital world that can steal Bitcoins.

Aside from malware, Bitcoins can be stolen in several other ways, such as:

Botnets

Botnets work by stealing information, like encryption passwords, or forcing a Bitcoin holder to mine the cryptocurrency. Basically, they are a huge network of computers that are infected with malicious software. If a botnet captures your computer, it will allow its owner to do almost anything with your system, including observing what you are doing through a live screen and logging into your keystrokes to steal digital wallet encryption passwords.

Phishing Attacks on Bitcoin Wallets

In this method, a hacker makes a clone website of a Bitcoin wallet or exchange. When a user enters their Bitcoin wallet credentials, it is immediately sent to the hacker. They can use this information to login the account of that particular user and steal Bitcoins. Practically, a hacker can do this with any website, though it may take longer than other methods as it requires work to create a replica of a website.

Malware and Viruses

The internet is brimming with a wide variety of malware and viruses, including those that target Bitcoin wallets and steal user information for accessing stored funds. Once these files are downloaded on your system, they search for the file named wallet.dat. Since it comprises of the private keys to your Bitcoin wallet, the hacker gains access to it and use the information in the file to steal your Bitcoins.

There is also Bitcoin ransomware that works similar to a standard ransomware software. It locks down your system and demands Bitcoins to be transferred to a specific address in exchange of unlocking it.

Lastly, malware is increasingly being used to hack into Bitcoin wallet. This malicious software lies dormant in your system, until you copy a Bitcoin address, triggering the malware. Upon activation, the malware changes the address into one that is owned by the hacker, giving them an unrestricted access to your Bitcoin wallet.

Bitcoin wallets are compromised whenever a hacker gets hold of its private keys, rendering them access to the funds stored in it. To prevent your Bitcoins from being stolen by hackers, make sure run a thorough background check before using a wallet or trading platform. Moreover, install top-of-the-line antivirus software, and put up a strong firewall security to track down malware. Lastly, always check SSL certification before entering sensitive information on a website to ensure you are being vulnerable to a phishing attack.

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