Public Wi-Fi Networks Compromise Bitcoin Security

March 12th, 2018

Who doesn’t like free Internet? Today, you will find public Wi-Fi almost everywhere – from cafes, airports and restaurants to shopping malls and even pubs. This makes it considerably easy to share photos, check emails, confirm reservations, lookup directions, and browse sites on the go.

But using public Wi-Fi networks can present a serious threat to your sensitive data as they are typically unsecured (which means they are accessible to all), and ideal breeding grounds for cybercriminals who want their hands on your Bitcoin.

Unfortunately, one Bitcoin user learnt this the hard way!

In November last year, a man in Austria connected to a public Wi-Fi network and checked his Bitcoin accounts only to find out that he lost around $117,000 worth of Bitcoin to cybercriminals who successfully moved it to an unknown, untraceable account.

According to a police statement, the user logged into his account to check the value of his Bitcoin. With the cryptocurrency experiencing wild price hikes, many people were actively keeping a close eye on their portfolios.

It’s still unclear as to whether the Bitcoin account of the victim was hacked before he connected to the public Wi-Fi. Nonetheless, the incident is a good example of how cybercriminals are hacking personal Bitcoin accounts as the cryptocurrency’s value continues to increase.

However, keeping in view hacking incidents like these, one thing is for certain: storing your Bitcoin in an online wallet or on an exchange isn’t a good idea, especially when it comes to accessing services such as these via public Wi-Fi networks.

Public Wi-Fi’s Are Inherently Insecure

According to Kaspersky Security Network, approximately 24.7 percent of the Wi-Fi hotspots worldwide do not use encryption at all. Not only can these open Wi-Fi hotspots be accessed by anyone at all, but also it’s difficult to verify whether the Wi-Fi signal is coming from a legitimate network or rogue hotspot set up by cybercriminals.

Moreover, since the traffic on public Wi-Fi is unencrypted, it becomes easier for malicious individuals to snoop on your sensitive data for their nefarious purposes. For example, hackers can set up a Man-in-the-middle (MITM) attack to sniff your traffic and get hold of your private keys to access and transfer your Bitcoins.

Did you know that hackers can create rogue Wi-Fi hotspots in order to lure people in? When you connect to these networks, they can communicate with your laptop or mobile phone and easily hack into it. From there onwards, stealing your Bitcoin isn’t much of an effort – especially if your public keys are stored on that particular device!

Cybercriminals Can Access Your Bitcoin Wallets

Bitcoin is here to stay. Yes, it’s a bit too volatile. Yes, you can buy other cryptocurrencies at a cheaper price. However, the increasing number of ways to spend Bitcoin – and the fact that it’s still going strong despite major setbacks – is a testament to the resilience of the world’s most popular cryptocurrency.

However, while the Bitcoin technology itself is more secure than other financial systems, a number of events over the past few years have shown that the services and wallets used to exchange and store Bitcoin may not be as secure.

Bitcoin wallets, where users store their digital currency “safely” and “securely”, can easily be hacked by cybercriminals. All they’d have to do is target your wallet or exchange provider and work their way into the device that holds your private keys to access your precious Bitcoins.

The exchange or wallet provider can be attacked to steal your personal information, including your private keys, which will then be used to access your wallet and authenticate transactions. Similarly, intruders may trick you into installing malware so they can hack into your device and steal your funds.

 

Phony cryptocurrency apps are another huge concern. Last year, fake Android apps for Poloniex popped up in the Google Play Store. Bitcoin users who installed these apps believed they were connecting to the exchange, but instead they might have ended up giving up the passwords to their accounts.

Now that you know how your funds can be hacked, we will take a close look at the ways to protect your Bitcoin wallet.

Top 6 Tips to Protect Your Bitcoin

Since a lot of people tend to lose their money because of carelessness, some basic rules must be followed at all times to protect your Bitcoin wallet from thieves and hackers. So without further ado, let’s get started:

  • Store Your Funds on an Offline Wallet – Never store your funds on an online wallet or exchange solution. You can keep hackers away quite effectively by using offline wallets like hardware wallets or paper wallets.
  • Be Wary of Phishing Attempts – Phishing scams are the bane of the Bitcoin world. So, keep a close eye on the domain of your wallet provider when you receive emails from them, and be cautious to avoid clicking any rogue ads or links. If you are not sure about the email asking for your login details, contact the official Bitcoin exchange to confirm whether it was indeed from them.
  • Enable Two-Factor Authentication – Besides setting up complex passwords for your exchange and wallet, make sure you set up 2FA to make it harder for hackers to gain unauthorized access to them.
  • Make Backups on a Regular Basis – The digital wallet you use for trading and transactions should be backed up regularly to ensure your Bitcoin isn’t lost if something happens to your device. Make sure to store them at a secure location such as on a USB or CD.
  • Use Small Amounts Everyday – Your Bitcoin wallet is quite similar to a physical wallet with money. Since you wouldn’t carry thousands of dollars in your pocket, you may want to consider doing the same when it comes to digital wallets.
  • Use a Virtual Private Network – By using a VPN, you can change your virtual location and encrypt all your Internet traffic to make your online activities completely anonymous – even if you conduct Bitcoin transactions or check your account balances!

Final Word

Public Wi-Fi networks are insecure, unencrypted, and present a real threat to the security of your precious Bitcoins. When it comes to using cryptocurrencies like Bitcoin, it’s important to have the security of a bank. Why, you ask?

Since Bitcoin isn’t governed by any administrator, you are your own bank! So, if lose your Bitcoin, you could end up losing it for good! Therefore, you should avoid everything Bitcoin-related while using such networks, unless your online activities are secured with a VPN or a similar solution.

Last but not the least, spread these Bitcoin security threats and measures to everyone you know. If all users in the Bitcoin world start taking their security seriously, incidents of Bitcoin theft can be reduced significantly!

Got anything you would like to add? Feel free to share your opinions and thoughts in the comments section below!

Author Bio

Shiraz Hashmi is a tech enthusiast by passion and a digital marketer by profession. He indulges in sharing nerdy insights into latest and upcoming tech, and sometimes into 21st century online marketing. When not working, he enjoys his time out reading his favorite books.

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