How to Avoid Losing Your Bitcoins to Hackers

My 387 Bitcoin got hacked and stolen. I realize it’s my fault to not create and keep my Bitcoin in a real cold storage. — Says a Redditor.

The blockchain technology and cryptocurrency space have been thriving and flourishing the past few years bringing many people with it from rags to riches. People who were living in their moms’ basements are now driving Lamborghinis, traveling the world, and living the lavish lifestyle, all thanks to Bitcoin and a few other cryptocurrencies.

Bitcoin, for example, was worth only $0.39 back in 2010 and recently it has reached an all-time high of $18,737.66. If you have invested just $100 back then, you would have around $28,341,266 (unbelievable, right?). Felicitations to all the lucky people who bought back then and held onto it.

Cryptocurrency, a new target for hackers

Cryptocurrencies are digital assets, and like all digital assets connected to the internet, they’re vulnerable to computer error and hacking attempts.

This ever-growing value of virtual currencies has made them an exceptionally attractive target for hackers and cybercriminals. In cryptocurrency’s brief history, we have witnessed major hacking incidents that have resulted in the loss of millions of dollars worth of cryptocurrency.

In August 2016, Bitfinex, a major Hong Kong-based exchange lost 119,756 Bitcoins, which was worth around $72 million at the time because of a vulnerability in the multi-signature system.

Another major hack occurred on Thursday, January 25th — a major Japanese-based digital currency exchange suffered from a major hack which resulted in the loss of around $534 million worth of the cryptocurrency New Economy Movement (NEM), a popular $3 billion dollar market cap cryptocurrency.

Is Cryptocurrency safe?

As we mentioned above, the whole cryptocurrency and blockchain space is full of vulnerabilities. No one body is safe, high-profile crypto influencers, exchanges, and companies have fallen victim to these data breaches and hacking incidents.

So the rule of thumb is: if it’s connected to the internet, it’s not safe. 

No matter what security measures you use to protect yourself, if something is connected to the internet, chances are it will never be completely secure from cybercriminals and hacking attempts. Especially in the case of cryptocurrencies, they’re complicated and most people are unaware of what they need to do to secure their precious digital assets.

How to protect your Bitcoin?

Although there’s no guaranteed way to protect your Bitcoin and cryptocurrencies, there are some security measures that you can do to avoid falling a victim to any potential threats or scams.

(1) Never share your private keys with anyone. 

A private key is simply a secret alphanumeric number that is used to send Bitcoin transactions to another Bitcoin address. It is a 256-bit large number which is generated randomly when you make a wallet, and it looks similar to this:

“9Dq2PMqDLhddWFnNfkkiE580ZmHu7SxdhyzDK55XhWSmcSGLF6SDF”

And generally, it should never be shared with anyone or any third party service because if you do you will risk losing all your Bitcoins.

(2) Never leave your Bitcoins on exchanges.

Cryptocurrency exchange platforms are used to trade (buy/sell) many various cryptocurrencies, and charges small fees for every trade that you make. And although they can be pretty convenient for purchasing many tokens, you shouldn’t rely on them to store your Bitcoin for you.

As we have mentioned above, many digital asset exchanges are vulnerable to hacking attacks and many people have already lost millions of dollars worth of their cryptocurrencies.

(3) Always have a back up

Even if you have your Bitcoin stored in secure off and online wallets, you still have to create a backup of your private keys somewhere in case you forgot your passwords, seed phrases, or anything.

Always make sure to save a backup of your private keys offline printed on one (or multiple) paper wallets, hardware wallets are also a good option as they tend to be much more secure than wallets connected online.

(4) Enable 2-factor authentication

Two-factor authentication (2FA) is a security measure used to provide an extra layer of security to online accounts, instead of just using the typical username and password (1st factor).

2FA is critical in the world of cryptocurrencies, you risk losing your Bitcoin to hackers if you’re not using Two-factor authentication on your exchange and wallet accounts.

(5) Secure your Bitcoins with a VPN

Bitcoin is a great payment system for everyone who doesn’t want to share too much of their personal information online in order to send payments.

However, it’s not completely anonymous. When you make a payment online using Bitcoin, snoopers can connect your Wallet address with your IP address and trace your real identity. A virtual private network (VPN) helps hide your IP address and protect your identity when you pay with Bitcoin or any other cryptocurrency.

(VPN.Express allows you to browse the internet anonymously without leaving a trail. It will help protect your online payment transactions from snoopers and hackers trying to steal your coins).

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