Most people describe bitcoin as a cryptocurrency or virtual currency that uses a decentralized network to connect users. therefore, bitcoin is not subject to the whims of national governments or central banks. The world currently has many cryptocurrencies in circulation, but bitcoin is the most widely used and popular digital currency.
political independence and protection of anonymity are the main strengths of this cryptocurrency. however, they also make bitcoin attractive to scammers and thieves. bitcoin has a gray area in some jurisdictions. that means local law enforcement doesn’t prioritize preventing bitcoin theft. but this does not deter people from using bitcoin. nowadays people use online platforms like bitcoin era to trade this cryptocurrency. such platforms allow people to access, buy and sell bitcoins. Ideally, people use crypto exchanges to trade bitcoin using fiat money. In recent years, some people have lost money to scammers when they hack cryptocurrency exchanges and transfer their bitcoins.
Reading: How to steal bitcoin
Stealing bitcoins requires more knowledge and technical skills than stealing fiat money. In most cases, sophisticated hacking attacks have been a part of bitcoin thefts. therefore, rogue exchange workers or accomplished outsiders play a role in these attacks. Here are some of the methods thieves use to steal bitcoins.
private key theft
Some people store private keys in digital repositories like cloud drives and exchanges. unfortunately, this increases your vulnerability to hacking and theft. once the thieves have acquired the private keys, they can use them to access and even transfer bitcoin holdings. therefore, legitimate bitcoin owners lose their funds to hackers.
See also: 4 Best VPNs to Buy with Bitcoin and Cryptocurrencies in 2022
exploitation of wallet vulnerability
Security flaws can make a bitcoin wallet vulnerable to theft through hacking attacks. In some cases, service providers store private keys within virtual wallets to improve convenience. Unfortunately, hackers can exploit a wallet vulnerability to steal both access and funds in one go.
fraudulent investment funds and exchanges
Some companies claiming to trade bitcoin appear legitimate. however, they are fronts that thieves use to commit financial crimes. Some of these companies promise large returns to attract investors. Unfortunately, these are schemes that lead to severe losses for investors. the ponzi scheme, for example, generated losses of up to $4.5 million for investors.
direct legitimate exchange attacks
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Cryptocurrency exchanges attract thousands of bitcoin users each year. Furthermore, people store millions of their hard-earned dollars on these platforms. for this reason, thieves attack them more often. hackers can steal bitcoins from the wallets of legitimate crypto exchanges. they can also withdraw money from the wallets of cryptocurrency exchange users. many merchants store bitcoins on crypto exchanges to enhance convenience. Unfortunately, hackers can target a legitimate crypto exchange and get away with money in users’ accounts.
Attacks on the dark web market
The dark web market and bitcoin exchanges have similar vulnerabilities. for example, Mt. gox was another bitcoin heist that hit the dark market known as the sheep market. this hack resulted in losses of about $100 million, based on exchange rates at the time.
Final Thoughts
The security issues around bitcoin are some of the biggest drawbacks of this cryptocurrency. Investors and traders should consider these issues before spending their hard-earned money on this virtual currency. doubling units of bitcoin is almost impossible. however, this does not mean that bitcoin users cannot be victims of fraud or theft. The bitcoin system has weak points and blemishes that sophisticated hackers can exploit. and this explains incidents like the ponzi scheme and mt.gox which resulted in millions of US dollars worth of losses.
Also, some incidents don’t get published, but people lose a lot of money when they happen. bitcoin exchanges are more vulnerable to theft because hackers attack them more frequently. therefore, choose your cryptocurrency exchange carefully before you start trading this digital currency.
