It’s very difficult to hack the bitcoin network but there is always a risk of coins being stolen from a wallet in a digital currency exchange. In other words, the risks are low, but not nil.

Share Market Live

NSE

The bitcoin network is underpinned by the blockchain technology, which is very difficult to hack. In blockchain technology, data isn’t stored in a central server, but across a huge network of computers, which is constantly checking and verifying if the records are accurate. This makes hacking a lot harder — a hacker will have to breach a huge number of servers to gather information.

For example, if a hacker tries to steal from a room with a single vault, it’s easy to do that. However, if a one tries committing a heist from hundreds of rooms with vaults, each containing bits of information on how to access the single vault then it becomes very challenging for the thief. It’s not impossible, though!

Since bitcoin came into existence in 2009, the entire network hasn’t yet been hacked. There have been instances of exchanges or wallets being hacked, but not the entire network. Having said that, there does exist potential security risks in various stages of the Bitcoin trading process.

Bitcoins are stored in wallets and traded through digital currency exchanges. So, it’s not difficult for users to access other peoples’ wallets and steal their coins. Though a two-factor identification process is commonly used as a security measure, if hackers can access some of the user’s non-cryptocurrency-related personal information, they may be able to infiltrate wallets and steal Bitcoins. So, all Bitcoin investors are advised to take proper precautions to protect their coins.

Bitcoin and the other cryptocurrencies taken together amount to a whooping $280 billion asset pile. Since the earliest days of the cryptocurrency, hacks, cracks, hijacks and phishes have threatened it. Till date, the assaults on the cryptocurrency have been around the edges. Even when Mt. Gox — the Tokyo-based cryptocurrency exchange that operated between 2010 and 2014 — was hacked, the heist didn’t kill cryptocurrency.

According to a Forbes report, published on December 23, 2020, there had been a massive data breach that involved personal information of more than 270,000 bitcoin and cryptocurrency users published online.

The data, stolen from popular France-based bitcoin and cryptocurrency hardware wallet Ledger, was published on RaidForums, a marketplace for buying, selling hacked information, the report said.