A bitcoin craze has certainly been going on in the economy!
With the value of the cryptocurrency reaching to $20,000 in December last year, an all-time high, it has garnered the attention of people from all over the world. Though the value of bitcoin has dropped down to somewhere around $9000, everyone still wants a piece it.
The growing craze has led to the intervention of government authorities that want to regulate and tax it. But it isn’t all, one of the major concerning factors here is hacking and stealing of bitcoins. Just like any other industry, cryptocurrencies like bitcoin is also susceptible to getting lost or stolen.
If you are all set to make an entry into this thriving sector or are already a part of, ensure that you got an idea of its other side. That’s right! It’s a possibility that these hacks or thefts will be ultimately the death of bitcoin among other cryptocurrencies. It certainly asks for a measured approach, but that’s for another day. Today, we are going to discuss those factors that could rob you of your bitcoins.
- Security Risks in Cryptocurrency Exchanges
Mt. Gox exchange has been the biggest hack in the history with $473 million worth of bitcoins stolen. Bitstamp with $5.1 million, a $66 million hack in Bitfinex and the recent one Coincheck losing about $400 million worth of bitcoins mark only a few of the most costly hacks ever.
This kind of hacks happen as hackers gain entry into company’s bitcoin wallets that have people’s funds. It could be because of the security concerns, that are too easy to bypass.
of the exchange.
Exchange hacks can also turn out to be scams. A company offers an exchange service related to bitcoin where customers maintain their bitcoin account and then suddenly one day, the company vanishes. The company may claim to be hacked but in actual, they have just pulled an exit scam.
- ICO phishing scams
There have been some notorious hacking stories related to bitcoin that happened when companies held their Initial Coin Offerings (ICOs). ICO is a form of fundraising where investors buy tokens of the project by either paying in cryptocurrency or fiat money.
What happens in these cases is hackers impersonate a company’s website with a fake one. The hacker then persuades the investors to send their funds to a different bitcoin wallet. Once you have sent your bitcoins, there is no recovering them. It means both the investor and the company has lost their bitcoins.
What you can do here is make sure that the website that you are sending your funds to is a genuine website.
- Exploitation of FB, Google, and Youtube Channels
The discovery of global channels like Facebook, Google, and Youtube to be used for scamming the bitcoin investors has been a recent one that led FB to ban these ads, but how exactly scammers achieve this?
Scammers offer instant money in exchange for bitcoins that asks for an initial startup fee with a promise to double your initial investment. With the wide reach of social media, they successfully broadcast their scam to thousands of people and stole bitcoins by not keeping the other end of the bargain.
Furthermore, these scammers use bitcoin as a bait to mess up your computer via malware downloads along with the phishing scheme where the scammers impersonate the bitcoin brand to gain a victim’s credibility.
Scammers target the Google search ads by spoofing the major brands of bitcoin industry that appears as ads at the top of the Google search pages. These spoofed ads forward the users to the look-alike pages that are under the control of scammers from where they steal victim’s personal information.
Recently, YouTube was also used by the hackers to mine the cryptocurrency on the users’ computers. The hackers basically took advantage of the advertisements that come before and between the videos. Apparently, these adverts contain a mining code that uses about 80% CPUs of the video watcher.
So, this kind of hacking and stealing risks you are vulnerable to when dealing with bitcoins. The complete knowledge, understanding, and caution are the keys here. If you have any queries or suggestions regarding the risks, feel free to reach out to me by commenting below!
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
I am an entrepreneur and a writer with a bachelors degree in Computer Science. I manage the blockchain technology and crypto coverages at Coingape. follow me on Twitter at @arya_achal or reach out to me at achal[at]coingape.com.