Bitcoin has become the prestigious digital currency in today’s world and demand of this particular currency has also increased throughout the globe. Due to expanded online presence, hackers never miss any hacking opportunity and try to find an illegal way through which they can exploit bitcoins.
Several hacking attempts have been made in the past and unfortunately some of these have been successful where thousands of bitcoins were stolen. In August 2016, hackers were successful in penetrating a safe authentication system at Bitfinex (a famous bitcoin exchange) and they stole nearly $70 million worth of the digital currency. This was one of the biggest thefts in the bitcoin hacking history. Likewise, another theft was made at the MtGox exchange where hackers took away almost $350 million in bitcoins.
Another authentic study shows that almost a third of bitcoin online platforms have been hacked. This kind of dangerous hacking activities have illustrated the significance of protecting bitcoin wallets from hackers. In order to tackle this problem, all bitcoin users should deeply understand the potential security risks. Anyhow, all such dangers can be avoided if a person adopts proper security measures. The bitcoin exchanges can also avoid the potential risks simply by employing the highest security systems.
Understanding Security Risks
There are many reasons why bitcoin wallets look attractive to hackers. It is known to all that bitcoin transactions are irreversible unlike credit card payments. Due to this fact, everyone should be very careful while processing transactions using bitcoin. Protecting one’s bitcoin wallet must the top priority. The following suggestions will make it easy for you to avoid the potential theft.
Back up Wallets Offline
Always prefer to back up bitcoin wallet offline. This has always been proved a safe step to secure your bitcoins. An individual having a bitcoin account with the name ‘TradeFortress’ (the founder of inputs.io) announced a theft of over $1 million in bitcoins from his company. The mistake they made was storing bitcoins on servers. TradeFortress admitted their mistake and suggested no to store bticoins accessible on personal computers connected to the World Wide Web.
It is highly recommended that bitcoin keys are written down on a paper or simply backed up on a computer which is offline. Furthermore, physical copies if your bitcoin keys should also be stored in a locked safe or any other secure location. A computer connected to the internet is always vulnerable to hacking attacks.
Encrypt Your Bitcoin Wallet
Encrypting your bitcoin wallet also helps in reducing the risk of hacking. There are different online services that play great role in protecting bitcoin wallet. You can opt for any of these including the DiskCryptor, BestCrypt or any other third party encryption services to safeguard online bitcion wallets. Moreover, Deep Cold Storage also provides ways to secure bitcoin wallets stored offline. So make sure to use one of these services to protect bitcoins against potential thefts.
Use Admin Controls
Access to your bitcoin wallets should be very carefully controlled. A study made by Secure Works tells that business organizations with manifold employees should restrict privileges with access controls. Bitcoin supports the ‘m’ and ‘n’ concept of transactions where numerous individuals can sign a transaction but not all the parties are required to move funds. This feature can stop an individual from stealing or freezing funds from account of a company. It is also a highly regarded part of Bitcoin wallet access plan.
Beware of Malware
Bitcoin traders normally seem unaware of the threat ransomware, Trojans and keyloggers pose. A report released from the Kaspersky Lab showed that bitcoins are targeted in more than 20% of total malware attacks. Moreover, bitcoin miners are considered to be responsible for 14% of the total financial attacks. Hackers also utilize keyloggers to gather user information for online payment and banking systems in order to access bank accounts.
Joe Stewart is the director of Malware Research, he tells that the ease of bitcoin wallets decorates them as attractive malware targets. According to Stewart, there is no complexity involved in the storage process of bitcoin wallets. That’s why it is considered to be some of the simplest stuff to write for the malware.
Bitcoin hackers normally use keyloggers and also the ransomware tools like CryptoLocker in order to target bitcoin users. In order to prevent the damage caused by hackers, a bitcoin user should update his anti-malware software on a regular basis and carefully monitor application software for any suspicious files. It is highly recommended that you opt for the reliable anti-malware software. Do not go for the free bogus software claiming to tackle all malware problems on your personal computer. It is better to pay a few bucks to buy software that can vigorously run a check on your system and eliminate any potential hack threats.
For more information about Bitcoins and other crypto-currencies, visit CoinBanks.com. For CoinBanks Bitcoin trading, register for a free account.