Unhackable? Examining the Security of the Bitcoin Network and its Vulnerabilities
Over 14 years has passed since the introduction of Bitcoin, the first and best-known cryptocurrency.
Although Bitcoin exchanges, wallets, and other third-party services that store the digital assets have all been compromised, the Bitcoin network as a whole has never been attacked.
The blockchain technology, which is a distributed, decentralised ledger that keeps track of all transactions, is the foundation of the Bitcoin network. A network of users known as miners, who utilise specialised computer gear to solve challenging mathematical puzzles, maintains the network’s security. In order to ensure the network’s integrity, these puzzles are made to be challenging to solve yet simple to verify.
Due to its decentralised structure, one of the most important features of blockchain technology is that it is extremely hard to hack. It would be extremely difficult and prohibitively costly for a hacker to control more than 50% of the network’s computer power, which is required to compromise the Bitcoin network. The Bitcoin network is therefore regarded as being highly secure and has never been compromised.
Although the network itself is protected against hackers, the digital assets that are kept inside are not. It has happened more than once during Bitcoin’s existence for third-party services like exchanges and wallets to be hacked. The Mt. Gox attack in 2014, which resulted in the theft of 850,000 Bitcoins, and the Bitfinex incident in 2016, which resulted in the theft of 120,000 Bitcoins, are two of the most well-known instances of these thefts.
These third-party services frequently store a significant quantity of digital assets in one spot, which attracts hackers and is one of the key reasons why they are susceptible to hacking. Additionally, it has been shown that many of these services have insufficient security measures in place, leaving them more vulnerable to attack.
It’s also important to note that while Bitcoin has never been directly hacked, alternative cryptocurrencies known as forks that are built on the same core technology as Bitcoin have occasionally been subject to hacks. Examples of these forks include Bitcoin Gold, Bitcoin Diamond, and others.
It’s crucial to note, though, that as a result of these instances, the industry has started to take security more seriously, and several exchanges and wallets have enhanced their security protocols. In order to further safeguard digital assets from hacking, technological advances notably hardware wallets and multi-signature have been developed.
Image Credit
Featured Image via Pixabay
