Can Bitcoins Be Stolen or Hacked?

The answer to the question above is quite short and simple- yes, Bitcoins can be hacked or stolen.

However, the process is much more complex and difficult to comprehend.

Bitcoin in itself is a technology that offers a very sophisticated level of security, however the user can compromise that with his own actions.

Every other day you will read one news or the other about some bitcoin scam or theft that has taken place.

So, let’s try to have a more detailed understanding of how Bitcoins can be stolen or hacked.

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How Are Bitcoins Stolen?

Usually, people have two options when storing bitcoins. One is that they let third party storages like Coinbase hold their bitcoins.

The other option is to generate a private key and store them in a cold storage. There are certain  Pros and Cons of Storing Bitcoins In Cold Storage which need to be considered.

When storing bitcoins in a cold storage, the private key generated is stored offline and is hence not vulnerable to phishing. This offers greater security to the storage of bitcoins.

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However, if one ends up exposing their private key to an outsider and a potential hacker, that leaves them open to an attack by the thief.

We have noticed that most investors go for the third party option because it is less hassle for them. However, there are some major drawbacks of doing so.

When using third party services like Coinbase, a user needs to provide an email/username and set a password for themselves.

They can access their bitcoins via these two. This makes it easy for hackers to break into the email accounts of the user, and ask for a reset password option, which then gives them access to the wallet.

This is a very common way for thieves to steal bitcoins and exploit the loophole of such third party services.

Another way in which hackers have stolen Bitcoins in the past is by posing as organisers of an ICO, and then getting gullible users to send them bitcoins.

How To Prevent Falling Prey To Bitcoin Theft?

The first step to prevent your bitcoins from being stolen is being more alert and informed about their use, storage and security.

Do not reveal your private key to anyone and preferably don’t store it on your computer. It is advisable to store it on a piece of paper or USB stick and to keep it somewheere safely in the physical world.

Use a two factor authentication for your email, to keep hackers out of it.

Be more aware of where your bitcoins are being stored and what is the security policy for that kind of storage.

Hopefully if you follow the above directions, your bitcoins will be less susceptible to an outside attack. Remember, better safe than sorry!

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