One of the biggest advantages of the blockchain is how safe it is. Since there is no single server, there are not many ways to hack into it. After all, the blockchain is on millions of computers so any changes made on a hash on a computer that gets hacked would be seen by everybody else on the blockchain.
Does this mean that Bitcoin can’t be hacked? There are some smart hackers out there so of course there are ways that Bitcoin can be stolen. This means that you can’t assume that the blockchain itself will take care of keeping your cryptocurrency safe. You have to be proactive and take some measures just like you would for your website security.
In this article, we will go over how Bitcoin can actually be hacked and what you can do to keep it safe.
Don’t linger on the exchange
An exchange is where you make the actual purchase of your bitcoin or other currency. You can buy it with your credit card, or exchange one cryptocurrency for another like XRP to BTC.
Once the transaction is done, take your cryptocurrency off of the exchange and put it into your wallet. Though many of the top exchanges are very secure, this is where hackers like to focus. Many of the exchanges are not on the blockchain so they do have a server.
Many people like to keep their coins on the exchange so it is faster and easiest to make trades on the fly. Unless you are a professional trader then there is little reason to keep your coins on the exchange for this reason.
Watch your wallet
The biggest vulnerability when it comes to your own Bitcoin is the wallet. A digital wallet is a register of the address of your coin on the blockchain. It’s essentially an encrypted code that tells the blockchain where to find your money. If somebody were to get access to these keys then they can take all of your coins.
So, you have to make sure that you take care of your wallet by doing a few things. For starters, don’t keep your Bitcoin in a warm wallet. This is one that is always connected online. It is easier to make purchases since it is always connected, but it is also vulnerable.
Instead, keep your coins in a cold wallet. Essentially, this is a sort of USB drive that plugs into your computer when you need it. It is encrypted, however so it isn’t exactly like a USB. It’s much more secure.
Don’t get phished
The easiest way to lose your keys is to literally give them away to somebody else. Don’t fall for the classic phishing scam in which somebody asks you to give them your keys. It could be in the form of an email or even SMS in which somebody pretends to need them for security reasons. The reality is there is no reason for anybody else to need your secret keys.