Investors worldwide have swarmed on Bitcoin and other cryptocurrencies, lured by the promise of quick riches regardless of the risks. Bitcoin's success has fueled legions of follow-on projects, imitators, and fans. Thieves, not to be left out, discovered opportunities as well—because where there is a promise of riches, there is an opportunity to steal it.
There are weaknesses that hackers can exploit, which means your cryptocurrency can be hacked; however, it can only be done in certain scenarios. So, how can you protect yourself and your investments?
Blockchain Security
Bitcoin launched in 2009—it is a decentralized digital currency, meaning it is not overseen or regulated by an administrator, group, government, or other entity. Peer-to-peer transactions fueled the rise of digital currency, which transitioned into a digital landscape where anything could be represented by a blockchain token.
Cryptocurrency blockchains are public ledgers that record and verify all transactions in a blockchain network. Everyone can see transactions, the pseudonymous addresses involved, and how much was transferred. However, these public ledgers do not allow anyone to access them and submit or change entries; this is done automatically by scripts, programming, and an automated transaction validation process.
How Is a Blockchain Secured?
Security is addressed in a blockchain through cryptographic techniques and consensus mechanisms. Blockchains use encryption to encode transaction information and include the data from previous blocks in each following block. The entire ledger is chained together through encrypted data. Each newly created block makes it more secure.
An existing blockchain, therefore, cannot be hacked in the traditional sense of "being hacked," where malicious code is introduced into the chain or someone "hacks" into the network with brute force and begins making changes.
Continue reading: https://www.investopedia.com/articles/investing/032615/can-bitcoin-be-hacked.asp
There are weaknesses that hackers can exploit, which means your cryptocurrency can be hacked; however, it can only be done in certain scenarios. So, how can you protect yourself and your investments?
Blockchain Security
Bitcoin launched in 2009—it is a decentralized digital currency, meaning it is not overseen or regulated by an administrator, group, government, or other entity. Peer-to-peer transactions fueled the rise of digital currency, which transitioned into a digital landscape where anything could be represented by a blockchain token.
Cryptocurrency blockchains are public ledgers that record and verify all transactions in a blockchain network. Everyone can see transactions, the pseudonymous addresses involved, and how much was transferred. However, these public ledgers do not allow anyone to access them and submit or change entries; this is done automatically by scripts, programming, and an automated transaction validation process.
How Is a Blockchain Secured?
Security is addressed in a blockchain through cryptographic techniques and consensus mechanisms. Blockchains use encryption to encode transaction information and include the data from previous blocks in each following block. The entire ledger is chained together through encrypted data. Each newly created block makes it more secure.
An existing blockchain, therefore, cannot be hacked in the traditional sense of "being hacked," where malicious code is introduced into the chain or someone "hacks" into the network with brute force and begins making changes.
Continue reading: https://www.investopedia.com/articles/investing/032615/can-bitcoin-be-hacked.asp
