Earlier this week, a bitcoin mining service had $64 million in cryptocurrency stolen, further reason for skeptics to continue their distrust of digital currency.
With this happening, people on the fence about whether they should jump on board and invest in the now front and center Bitcoin are worried about its lack of security. However, Bitcoin is actually extremely secure, and very difficult to steal. Stories like this are quite rare. Regular individuals can protect their digital currency easily, if they are knowledgeable about what they need to be doing. It is lack of understanding that opens up the door to online theft.
Regular investors tend to rely on services such as Coinbase to buy and store their virtual money. That’s a great option because those companies use the security features already built into Bitcoin, just like a person would do if they held it themselves
Other people set up a Bitcoin wallet to keep track of their money. This involves a few extra important responsibilities. One must keep track of a group of keyboard characters called the “private key” and “public key.” The private key is a way to secretly look at and access your money that no one else knows. Whereas the public key is what other people use to give you more Bitcoins.
Bitcoin is designed by using complicated algorithms, so it’s almost impossible for a person to guess the private key, meaning no one can hack into your online wallet.
Therefore, the only way a person can steal your Bitcoin from you is if the third party you put your trust in, or the thief themselves trick you into giving them the private key, or for that third party company to be hacked themselves. There are a few ways this can happen, and they can all be avoided.
A thief can figure out your password for your account with a service such as Coinbase. By using a third party service to hold your money, you no longer have to deal with keeping track of your key codes. You set up an account like you would with most online sites, and decide on a password. The way people can get ahold of your password is by hacking into your email and finding your message string with your service provider. Then they simply as for a password reset. Once they have that, they can get into your Bitcoin account and steal your money.
To prevent this from ever happening, secure your email with a two-factor authentication to keep out the hackers. Do the same thing with your third party service account. And make sure you set it up with an app-based verification option like Google Authenticator, because texts can be intercepted. These steps are the normal protocol for setting up any online account that you want to remain secure.
If you choose to manage your own wallet, then you will want to be careful not to expose your private key. It would be difficult to share this key without deliberately showing it to someone or storing your key code in an unsafe location such as your email. Make sure and keep your anti-virus software up to date and installed on your computer at all times as well. Keep that private keycode written down in a safe place not on your computer, or on a USB stick.
The last biggest way you can be hacked and have your money stolen is by trusting an insecure third party site. That is what happened this week when $64 million was stolen from a bitcoin mining service, known as NiceHash. Hackers found their way into an employee’s laptop and got access to the company’s payment services. Once the hackers got inside, they secured access to one of the company’s Bitcoin wallets that also included the personal funds of NiceHash customers. The thieves were then able to empty those funds.
Having your cryptocurrency stolen is extremely unlikely if you use the right security measures, don’t share your keycodes and utilize only top-notch third party services with an excellent reputation.