Bitcoin Security Issues

Bitcoin is a digital currency using a blockchain network to record transactions. Bitcoin is a relatively secure financial system, but potential investors should be aware of bitcoin cybersecurity issues before investing.

Is bitcoin safe from hackers?

For the most part, bitcoin is secure due to blockchain technology. The blockchain relies on cryptography to validate transactions. Bitcoin also makes its transactions available publicly while keeping the users involved anonymous. Furthermore, the blockchain doesn’t store personal information when buying or selling bitcoin.

This security means bitcoin is mostly safe from hackers, but there are ways for hackers to gain access to your digital wallet and steal your cryptocurrency.

Concerns with bitcoin

Some of the issues with bitcoin security include:

• Blockchain cybersecurity risks: Blockchain uses hash functions to give every transaction a unique unbreakable fingerprint. This feature means the blockchain cannot be duplicated or infiltrated. However, incorrect or fraudulent information in the chain cannot be overridden.
• Bitcoin wallet security: Unsecure crypto wallets can be exploited, allowing hackers to divert funds to another account. Weak spots, intercepted communication between wallets and PCs, and other vulnerabilities put bitcoin funds at risk.
• Hackers and cyberattacks: Though the blockchain is difficult to attack, bitcoin exchanges can be hacked. These cyberattacks create a security concern.
• Selfish mining: Some powerful mining pools can mine a block and hide it instead of broadcasting the new block to the network. Selfish mining can invalidate transactions on the network and give selfish miners an advantage over other miners.
• Double-spending: Double-spending is when the blockchain network is altered to redirect cryptocurrency, allowing the sender to keep the funds instead of sending them to the receiver. Bitcoin has many safeguards in place to prevent double-spending.
• 51% attacks: For the blockchain to be hacked, a mining pool would need to control 51% of bitcoin mining capabilities. This power could be abused to make blocks invalid or double-spend bitcoins. Though 51% attacks are a security concern, they’re very unlikely to occur.

Bitcoin cybersecurity tips

Follow these security tips to keep your bitcoin investment safe:

• Store your cryptocurrency in a hardware wallet.
• Keep your keys private and offline.
• Move crypto you’re not actively trading from a hot wallet to a software, mobile, or desktop wallet.
• Be vigilant for potential scams.
• Do not tell anyone how much cryptocurrency you hold.

Learn more about our cybersecurity services

Agio offers managed IT and cybersecurity services for financial firms. Learn more about how we can support your IT team by contacting us online.