Can My Blockchain Wallet Be Hacked?

April 25th, 2018

Blockchain technology is becoming a trend all around the world; millions of people are using this new mode of payment. But before you start using blockchain wallet, there are few things to clarify. Can blockchain wallets be hacked? This is one important concern among several digital currency users. A few months ago, news about a Bitcoin mining service hack broke the internet, underscoring the fact that digital currency attracts thieves and scammer. How safe is your digital wallet? These stories can scare anyone who may fear digital currencies are not just volatile, but also insecure.

What’s The Truth?

News of digital currency hacks are true, but the truth is, that blockchain technology is completely secure; anyone can protect it with ease. The problem is, that not all users understand how blockchain works and this often leads to theft and cases of a hack. There are numerous ways that hackers can take control of your digital currency from your blockchain wallet, you need to be smart to avoid such hacks.

How Does Blockchain Technology Protect Your Money?

Blockchain technology brings the user safety features, that make it difficult for thieves or hackers to steal money. Digital currencies come wrapped in safety deposit boxes, which are called wallets. The question that arises, is whether users can operate wallets themselves or if they need to trust a third party to do it. In most cases, people select the latter option. Several third-party services are available where you can store, send or receive digital currencies in just a few simple steps. It’s a sensible option as, digital wallets rely on advanced security features.

The other option is acquiring a digital wallet for yourself. This requires every user to keep track of two important keys, the private and public key. Think of a public key as a safety deposit box, where you can receive or store digital currencies, and a private key is a secret way of opening that box.

The blockchain technology is designed in such a manner that it is tough to guess the private key, which means that no one can ever hack into safety deposit box or digital wallet. This means that the only way of getting access to your digital wallet is by tricking you. It may be a case that third party you rely on give access to it or third party sites getting compromised.

Here are some examples of how it can happen:

  • Hackers Obtaining Your Password – Many online services are available where you don’t have to go through the hassle of remembering the private and public key. It’s similar to online banking, where the user name and other details required to login. Thieves or hackers can rob you by getting access to the login details. One common way to do this is by hacking your email account and resetting the password.
  • Exposing Your Private Key – This risk exists if you manage your own digital wallet. Some may easily get access to your private key by hacking into your email address or finding the private key in the physical world. Several such cases have happened, where hackers steal the private key and empty digital wallet.
  • Hackers Imitate Digital Currency Recipient – This is one of the most notorious digital currency hacking stories. Smart hackers imitate the company with a fake portal and convince the investor to send money to a different bitcoin wallet. Once the digital currency is sent there is no chance of recovering it Make sure you confirm the wallet address and its authenticity before sending any information or money.

Relying On An Insecure Third Party – These kinds of incidents are similar to hackers compromising a target payment system and stealing customer account details. Having a suitable cyber security measure is important. It is important to select Bitcoin companies carefully when doing business

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