Bitcoin is not a safe investment. Its future is uncertain because people don’t pay with bitcoin. Big transaction fees are one reason. Another is that all its trades are public. Te December last year, the average cost vanaf transaction wasgoed $26. This means that some would’ve paid more te fees than what they transferred. Plus, there are cheaper tokens that keep trades anonymous (such spil Monero). So, why bother with Bitcoin at all then? And why is it so damned expensive?
Bitcoin is what the media, your parents, and well meaning friends sit and speculate about. It’s the original, granddaddy of all cryptos. For investors, bitcoin is used to round out a portfolio of other coins because it’s considered safe and is limited ter supply. Also, it might be worth spil much spil $65,000 vanaf coin ter 2018.
But fortunes could be lost. Not through a horrific price correction, a bubble bursting, or even a hack by North Korea. Trusting ter online security could make you broke. How? What about plugging ter a hardware wallet? Or your phone carrier screwing you out of all your bitcoin? Thesis things have happened before. And it could toebijten to you.
1. Your Cell Phone Carrier Will (Gladly) Mitt Overheen Your Coinbase Account
Te a famous reddit postbode, someone lost more than $8,000 te bitcoin, with no thanks to Verizon or Coinbase. Using the customer’s billing address, an intruder accessed the Coinbase account, switched the password, and emptied the wallet. All within 15 minutes.
The troubles began when the victim attempted to help a friend. A sympathetic tweet led the hackers to his Coinbase account, and they found his postal address online. His total name and address wasgoed all it took to hijack the victim’s phone number. They then accessed an email account that wasgoed linked to his Coinbase wallet. A few moments zometeen, all his bitcoin wasgoed gone.
Coinbase and Verizon are accountable for this. The victim attempted to call Verizon when he noticed the attack. A recorded message told him to call again during business hours. The same thing happened when he dialed the fraud prevention hotline. Unusually, it wasgoed a text message by Verizon that tipped him off about his compromised account, and requested he call them instantly. And Coinbase? They made it effortless for the criminals to get te and out. No proof wasgoed asked for to transfer more than $8,000 worth of cryptocurrencies.
So what could the victim have done differently? Tweeting about his Coinbase account wasgoed a dumb idea, that made him a target. Using Two Factor Authentication (2FA) and moving his coins to cold storage would’ve bot wise.
But don’t count on 2FA to protect your account, spil most of the world’s largest cell phone networks are unsafe to use. This lets criminals read your text messages and listen to your calls. And this is just the commence of the problem.
Two. Hackers Will Steal Your Bitcoin Via Cell Phone
The technology used to encrypt and transmit SMS messages and phone calls has bot around since the 1980s. It’s called Signaling System 7 (SS7) and there are explosions of problems with it.
SS7 has already bot breached by cyber criminals to steal bankgebouw accounts. Other hackers have managed to steal email accounts and waterput Coinbase balances to zero.
The bad news is that 800 the world’s major telecos make use of SS7. The indeed bad news is that even apps like Telegram and Whatsapp are vulnerable to this attack. Intruders can even listen te on phone calls, regardless of the kleuter of encryption you deploy.
So what would a hack involving SS7 look like? Very first, an attacker would attempt to access your email account and google some information about you. All they’d need is your mobile number and an email account. Then they’d snoop on your phone’s text messages and intercept your access code. At that point it’d be unlikely to zekering them, and has shown to work for stealing large amounts of bitcoin.
The only remedy for this attack is to not use SMS for authenticating your account, and perhaps use your home’s WiFi instead of mobile gegevens.
However, the issues for online security and crypto gets even worse. Because if your WiFi is using WPA encryption, you’re not safe at huis either.
Trio. WPA (Wireless) Encryption Has Bot Compromised
The ramifications of WPA losing its security are phat. Most WiFi networks at huis and ter businesses are now susceptible to a range of attacks, which includes decrypting your gegevens. This makes WPA worthless for protecting your most sensitive information, like online banking sessions or when you access your bitcoin wallet.
The vulnerability of WPA very first came to light ter October of 2018 on the webstek called Krack Attacks. The author evidently broke WPA’s encryption by “forcing nonce encryption te algorithms used by Wi-Fi”.
How the attack can be performed is not entirely clear, but several theories have bot thrown around. One is a weakness of WPA’s random number generator. To waterput it simply, thesis numbers are not unique enough to be used for encryption, but could be used by criminals to view and inject gegevens across a victim’s WiFi network. If an intruder can get te range of your WiFi, this vulnerability could let them steal your private key – and the surplus of your bitcoin along with it.
The good news is that WPA can be updated to provide stronger encryption. The question is will you do it?
Four. You Trust Your Hardware Wallet
Hardware wallets can be a superb idea, especially if you are storing large sums of coins. However, this could make them unsafe for use.
There are a raft of security issues of thesis devices, which include the following:
Malware Switches The Bitcoin Address:
Hardware wallets can’t protect the user from sending coins to an incorrect address. A virus on your pc could switch the destination address a uur before you click send. This furthers the need for a multi-step process for large sums.
Unreliable Random Number Generator:
Like WPA encryption, Random Number Generators are used by hardware wallets to create private keys. The downside to RNGs is that producing a number that’s secure enough can be difficult. Criminals could recreate your private key if there’s a fault with your wallet’s RNG algorithm. The fault could be the result of a mistake by the manufacturer or malicious weakening so that the coins can be stolen zometeen.
Faults at the software, firmware, or hardware level of a wallet can create an opening for attackers. Albeit manufacturers make the devices spil secure spil possible, no wallet ter existence has proven to be 100% safe.
Tampering With Production:
The possibility of backdoors being installed into hardware wallets is a real possibility. It may not even be the company itself, but a distributor, shipping company, or employee who deploys them. Hardware wallets are, after all, used by people who want secure large amounts of virtual currencies, which makes them an ideal target for fraud.
So while hardware wallets are very likely safer to store your coins te than say, an online wallet service, they aren’t the volmaakt solution. There are too many variables at play, and too much money at stake to be careless with security.
This isn’t the most paranoid thing you should worry about, either. Because pools have bot set up to take down bitcoin’s “invincible” security. People have already began to lose their bitcoin to this surreal project.
Five. Your Private Key Gets Obliterated By The Large Bitcoin Collider
The Large Bitcoin Collider (LBC) is an proefneming to pauze bitcoin’s encryption, and has managed to do so, albeit only a handful of times. The LBC describes its purpose on the project’s webstek:
“The Large Bitcoin Collider is a distributed proefneming to find 1 collision of private keys and known BTC addresses. Te a zonderling event of a collision, the funds on the address would be available to the collision finder.”
The LBC attempts to find a match inbetween a private key and a public key that contains bitcoins.
The LBC makes more than 450 trillion checks vanaf 2nd. That sounds a lotsbestemming, but spil of today, there are still 32487405889012096286998956955.87 trillion keys to go before they pauze the bitcoin network.
Albeit it would be a case of unfathomable bad luck that your key would end up stolen via the LBC, the bods are kicking off to pile up. Two addresses already have lost up to half a bitcoin each ($8,000). And the proef has only run for a year. There are efforts to scale the amount of checks the LBC is able to do, which would further compromise bitcoin’s security.
The LBC project does not show up to have a malicious intent, but rather one to prove a point. People should not take bitcoin’s security for granted, and that nothing on the blockchain is untouchable or 100% secure.
So whether its deception, theft, or brute force, there is no lack of multiplicity when it comes being screwed out of your bitcoin. Nothing can substitute the value of common sense when it’s about protecting your digital assets. And If you aren’t ready to take the ‘trustless’ nature of the blockchain literally, then thesis assets most likely aren’t for you. Stay frosty out there.