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Can cryptocurrency be hacked?
Are cryptocurrencies safe? Can cryptocurrencies be hacked? These and other questions are on the minds of traders, investors, supporters, opponents and regulators the world over. Bottom line is that yes, a cryptocurrency can be hacked. Let’s face it, it’s just another technological puzzle that is attracting the attention of technogeeks and criminals alike; sooner or later someone will figure out how to do it. Of course, it’s already been done. Blockchains and cryptocurrencies are attacked every day if for no other reason than it’s possible. The real reason though is because blockchains represent value and money and where there is money there is motivation.
DigitalBank is a cryptobank creating the future, today.
So how can users protect their private keys (and funds) from hackers.
To perform a standard transaction using another wallet, you make use of a private key (a long, randomized alphanumeric string of data known only to you) and a public key that is out there for everyone to see.
Secrecy is paramount, because if anyone else gets their hands on your private key, they have just as much power to access your funds as you do. While this setup is great for verifying transactions without revealing your private key, that key can beand has beenstolen.
And mainstream adoption of cryptocurrencies cannot happen until investor funds are truly secure. Even keeping your private key completely offline in a paper wallet (literally written on a piece of paper) is less than optimal, since that piece of paper can be lost, destroyed in a fire, or stolen. Instead of generating and storing a private key, the DigitalBank Vault Device, uses a different system . Any kind of ” Keys” never leaves its device (so can’t be intercepted).
The Private Key is never stored on the device . This means that each transaction is trustlessly verified without exposing any sensitive information about the users involved.
The result is an ultra secured crypto storage device , that is a huge step up in crypto security.
DigitalBank has a solution that stops hackers in their tracks. The DigitalBank Device gives users the convenience of signing transactions that a private key would normally providebut without forming a private key that can be copied and stolen. Traditionally, the signing process is performed on a device on which secret user data (private key) is also stored or derived, which creates a single point of attack.
The DigitalBank Device OS , replaces the conventional method of signing transactions with a distributed signing algorithm. As recent events around the world demonstrated, owners of cryptocurrency are in danger of being physically attacked by thieves who can force you to hand over access to even a secure hard wallet.
That’s why the DigitalBank implemented mechanisms to protect user funds in any situation
Sure, nothing is unhackable ,but the DigitalBank Device , comes so close and makes accessing user data so difficult that users can finally feel secure about their crypto holdings.
The strength of a blockchain lies not in its ability to repel attack because it can’t. The strength of a blockchain lies in the redundant nature of the DLT, the distributed ledger technology. It’s pretty easy for a black hat to hack into a mining node and falsify a transaction. It’s hard for a black hat to hack into every mining simultaneously and impossible to do that and alter the enter blockchain up to that point and believe me, that is what you’d have to do to fake a Bitcoin.
Blockchains are distributed ledgers. A ledger is a record of transactions, a distributed ledger is one that is shared with a community or the public in order for audit and verification. The analogy that best sums up how a blockchain works is the box of checks. Each check represents a transaction akin to a Bitcoin or other altcoin exchange. As the number of transactions and checks grows you will eventually fill a book and then a box. The box is like a block in the blockchain. The block is a set number of transactions that have been bundled up and added to the chain.
Before the block can be added to the chain however it gets distributed to all the mining nodes on the network. This is so that they can each verify that the transactions contained within the block are all valid. This audit means that each unit of cryptocurrency can be traced back through the chain from transaction to transaction to the very point it was mined. It exists in every block from the point of its mining forward and has been verified by the network. Each node on the network is an independent operator and third party auditor, if even one of them rejects a block – it is invalidated.
That being said there is plenty of risk for cryptocurrency traders and investors. Remember, we’re talking about real money regardless the form and that means there will be criminal elements lurking in virtually every digital shadow they can find. While the blockchain and the altcoin themselves are relatively safe from hacking, you still have to connect to the Internet to buy and sell them. The connection itself can and will be targeted. Hackers can watch for traffic searching for those websites or traveling to and from them.
After that you will have to link your bank or credit card information to an exchange in order to make your transactions and that will put your data at risk. Sure, most if not all of the exchanges are using a two-factor authentication process but even that is not un-hackable. By now you’ve got your account all set up and it’s time to buy some altcoins but where do you hold it? Online exchanges are vulnerable to hacking as evidenced by Bithumb’s break-in early in 2017. The exchange reported that 30,000 customers’ information had been compromised and more than $1,000,000 in cryptocurrency had been stolen.
Losses included actual theft from accounts whose passwords had been stolen along with phishing and other frauds. The bad news for owners of the altcoins is that the transactions can be tracked on the blockchain but are impossible to recover. Altcoins are sent and received in wallets using anonymous addresses. Once received they could be transferred to any other wallet on the net and/or exchanged for fiat currency and withdrawn. Mt. Gox, then the largest Bitcoin exchange in existence, had more than $450 million of the coin disappear without a trace and there are more of such stories.
A solution to this is to hold your coins offline in a computer-based wallet. This means downloading more software to your device, storing a cumbersome list of security questions/responses and risking a personal attack. To further secure your coins there is the final step, cold storage, holding your coins in an encrypted file on a memory stick. Safe from attack but at risk from degradation, a stray magnet, loss or damage.
And the risks don’t stop there. If you aren’t careful with your choices you could easily fall prey to a number of scams and frauds based on cryptocurrencies. One that has gotten a lot of attention lately is the ICO, or initial coin offering. This is a way for a new blockchain or blockchain based technology to get funding at the start-up level. In many cases the start-up is legit, you receive whatever coin it is they are offering and off you go. In some cases the businesses are not only fake but outright frauds only intended to get hopeful investors to send altcoins to their anonymous address. Other scams include fake trading exchanges advertising quick and easy profits. These range from those offering to buy/sell altcoins to those providing spot style forex trading and even binary options.