Investors from all around the globe are flocking to acquire Bitcoin, causing some governments to impose stringent controls. The success of bitcoin spurred the growth of hordes of followers, including hundreds of additional cryptocurrency launches and a surge of blockchain-based enterprises. Nonetheless, despite all of the buzz around bitcoin, many investors remain skeptical about the currency’s security. Is it possible to hack bitcoin? How should investors act to safeguard their investments if this is the case?
Bitcoin, introduced in 2009 as a decentralized digital currency, meaning it would not be supervised or controlled by a central authority such as a government or bank. Bitcoin has been at the vanguard of the digital currency revolution, powered by peer-to-peer transactions. The blockchain is a distributed public ledger that verifies and records these transactions.
Since its inception, security has been a critical concern for bitcoin. On the one hand, the blockchain technology that underpins bitcoin makes it very difficult to hack. Because Bitcoin users continuously examine blockchain, hacks are rare. On the other hand, bitcoin is challenging to hack does not necessarily imply that it is a secure investment. There is the possibility of security issues at many phases of the trading process.
Bitcoins are stored in digital wallets and exchanged on currency exchanges such as Coinbase. There are several inherent security hazards associated with each of these components. Developers are continually enhancing wallet security; however, some individuals want unauthorized access to other people’s wallets to steal their tokens and cash.
Two-factor identification is employed as a security mechanism throughout the transaction process. Tying the security of a transaction to an email address or a mobile phone number implies that anybody with access to these components may authenticate transactions. If hackers get access to any of your non-cryptocurrency-related personal information, they may still be able to penetrate your cryptocurrency transactions.
Frauds, scams, and hacks have plagued individual investors and even big cryptocurrency exchanges throughout the brief existence of cryptocurrencies. A portion of the problem stems from technology and space being novel. While this makes cryptocurrencies like bitcoin highly intriguing and possibly very lucrative investments, it also means that some want to benefit from security vulnerabilities before they are fixed. All bitcoin investors should take the necessary safeguards to safeguard their assets.
