Bitcoin trading was started since 2010 which is the source of Bitcoin’s universal myths or discussions. When a Bitcoin exchanged gets hacked, financial media considers this hack a result of the flaws of cryptocurrencies. Until now, Bitcoin protocol has never been hacked. Due to its next level encryption, hackers do not attack Bitcoin directly. Instead, they manipulate the weaknesses of Bitcoin exchanges.
Are Bitcoin Exchanges Vulnerable To Hacking?
According to the report of the U.S Department of Homeland Security, one-third of Bitcoin exchanges were hacked between 2010-2015.
A South Korean exchange ‘Bithumb’ was hacked last month with 30,000 customer’s data on it. The hackers were able to steal $1million worth of bitcoins. As a result, the price of Bitcoin dropped about 3.5% during the following two days of the event.
Bithumb revealed that employee’s computers which provide the access to customer’s data were targeted during the attack.
In August 2016, Hackers successfully took 120,000 Bitcoins, worth $65million from Bitfinex exchange. In that case “Hot wallet” feature was the weak link. These frequent Bitcoin exchange hacks are no doubt concerning, but this should not be a reason to dismiss Bitcoin usage.
For example, if a diamond jewelry shop is successfully robbed, it’s not the diamonds’ fault, rather the security management that was hired by the owner. Same is the case with the Bitcoin code users.
Why Has Bitcoin Itself Never Been Hacked?
Bitcoin codes use a network security protocol known as SHA-256. SHA: Secure Hash Algorithm. This is the prime reason why Bitcoin is known as a cryptocurrency. SHA-256 is widely used by the government and financial sector of the Bitcoin and was designed by the National Security Agency.
Crypto experts and programmers believe that SHA-256 is unbreakable by the currently available technology. Chris Wilmer, founder of Blockchain-Focused said, “Bitcoin itself, and most of the other cryptocurrencies, have never been hacked or even really had any downtime.”
Due to the fact that Bitcoin uses SHA-256, and that its transactions are broadcasted to the network for confirmation, Bitcoin is the securest form of currency ever created.
Just think about it, if you have fiat money and it gets stolen or snatched by someone, it becomes incredibly difficult to trace it. In addition, a stolen bag exposes your data including bank’s check book, debit/credit card to untrusted parties and takes a whole lot of months to resolve the issue.
Besides, credit/debit is an old fashioned payment system. Considering the tools available these days, hackers could get an easy approach to this old form of digital money.
Today, the Credit card breaches have become a daily routine. The hits at Target Corp. (NYSE: TGT) and (NYSE: HD) occurred a couple years ago. Neiman Marcus and Wendy’s Co. (Nasdaq: WEN) breach is another example which just happened in 2016. The most recent ones are Chipotle Mexican Grill Inc. (NYSE: CMG), Arby’s Restaurant Group, and Kmart Corp, which happened in 2017.
Whereas, bitcoins are safe at your Bitcoin exchanges and provide maximum security against breaches. Don’t let one or two incidents define the whole currency and start your Bitcoin venture right now!