Author: George Basiladze
George is a finance guy with in-depth knowledge of financial systems. Together with Dmitry they designed and developed Cryptopay.
Despite the benefit of bitcoin being an online digital currency, this fact also makes it a target for cyber theft. There have been numerous cases reported where users and even companies have lost access to wallets with large amounts of bitcoins. There are a number of ways that cyber criminals can attempt to steal bitcoins, from highly-targeted attacks to opportunistic phishing, and all cause serious losses for the victim. The irreversible nature of bitcoin transactions makes it incredibly difficult to recapture stolen funds, even when they can be tracked from address to address.
Viruses can infect a system with the sole intention of seeking out and stealing wallet data; the all-important private key. Once an attacker has the user’s private key, this can be used to rapidly steal any funds contained in the wallet, sometimes before the user realizes their computer is infected. This can cause substantial loss, as some users may believe they can securely store large quantities of bitcoin on their regular browsing PC.
There are a number of ways to protect against such attacks. Cold-storage is the ultimate defense; bitcoins can be stored on an offline device, wherein the private key is never within reach of the internet and potential thieves. However, for many users, setting up a separate, cold-storage PC may be unrealistic. These users may find protection against such attacks by using a secure online wallet platform like Cryptopay. Wallet providers can afford to set up more involved security practices and provide systems such as Two-factor authentication, which can go a long way toward protecting funds. The companies are often well insured, possessing sophisticated cold-storage systems. With 2FA active, you are required to enter both your password and a 2FA code from an app on your mobile device to access your account. This second layer of defense means that attackers need to gain access to both your password and mobile device before your account is compromised. Cryptopay also enables you to spread your funds between your bitcoin wallet, euro flex account and pound sterling flex account. This can give you extra security and even the ability to protect against market fluctuations.
Phishing attacks are about awareness; never click on an unknown link that feels risky. This type of opportunistic attack tries to take advantage of our trusting nature, and can be avoided with a healthy dose of skepticism. If an unknown email seems too good to be true, it probably is! One specific threat associated with Bitcoin is ransomware. These are malicious programs which infect the user’s computer and encrypt their files, rendering them unusable. The user is told to pay a ransom to regain access to their files. Attackers will usually request a fee, paid in bitcoin, before sending the user a decryption key. Many non-technical users will simply pay the ransom to save their files, as attempting to defeat the threat otherwise can be complex. This can be costly and somewhat distressing. Protecting against ransomware can be as straightforward as ensuring your files are safely backed-up. This can be done using the growing number of “cloud” storage facilities; many of which offer gigabytes of free online storage. When files are properly backed-up, ransom threats are less worrisome, and the malicious software can often be removed without issue. There are a number of open-source toolkits available to assist in removing such malicious software.
While it is possible to be vigilant and avoid these threats, there are numerous resources which provide assistance with avoiding and fighting malware, including a powerful, free anti-virus software. Use a reliable bitcoin wallet, or if you choose to manage your own private keys be sure to keep your machine secure and consider cold-storage for larger assets!!!