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Bitcoin Wallet Related Security Issues and Protection Tips

Bitcoin is one of the widely used cryptocurrencies known as digital currency as well. Evolutionary growth and immense demand since 2011 made this digital currency a tempting opportunity not just for the traders of any specific origin but for the whole world. Its supersonic rise in price particularly after the pandemic Of 2020 put almost everybody in the situation of to be or not to be. The surprising increase in demand made this digital currency the hot favorite of international traders in the emerging markets. The supersonic Bullish trend of BitCoin during the time of 2015-2020 made this cryptocurrency highly sensitive and insecure to some great extent. Some unfortunate recent incidents of online theft and hacker attacks developed an alarming situation not just for the investors of developing economies but left many questions, unanswered about its safe storage for the developed economies as well. In this piece of writing, we will unfold the security-related issues of BitCoin as well as we will analyze the best storage methods for cryptocurrencies keeping in view the different circumstances and threats. 

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Bitcoin Security Issues:

It is an established and undeniable fact that Bitcoin is a digital currency that has no physical existence. The security issues of this digital currency have now become a matter of great controversy among the Holders of Crypto assets. All the initiatives and efforts made towards its foolproof safety and secure storage are no doubt appreciable but despite applying extraordinary safety features, some significant threats are still a matter of great concern. As several services offer the facility of an online wallet, however, some offer the offline storage facility as well but security threats still exist and can not be simply ignored. Some folks justify that the digital exchanges are a kind of safe haven for the digital assets and their safe storage but remember history always helps making future decisions and we cannot simply ignore the unfortunate incident of MT.GOX. However, keeping in view all the possible and major threats to the existence of this ever-growing digital currency, we will be explaining all of them so that our readers become vigilant and updated about expected security threats and possible safety measures.
The client-side applications are usually known as ‘wallets’ are actually used to manage the Bitcoins owned by the client as well as the transaction of the Bitcoins from/to the client. The client has two available options now, either he/she can avail of the online wallet services or he can select the wallet applications downloaded in his/her node. Honestly speaking, the online wallets are usually considered more vulnerable to attacks and thus need to be encrypted and backed off-line. Existing backup facilities authorizes the user to retrieve old wallet files, data, and its contents. The coin history is actually traceable that leads to link the user identity with the Bitcoin address. Distributed denials of service (DDoS) attacks are a kind of potential threat for the available online wallet applications. Protect from attacks keep crypto wallet safe make secure backup bitcoin wallet security measures password requirement and backup restore techniques.

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Following are the possible threat levels that can be faced by the holders of BitCoin

  • Double-spending Element
  • Selfish Mining Threat
  • Attacks on the Wallet Softwares
  • Potential threats of Time Jacking Attacks
  • >50%’ Attack (Major Threat)
  • Malware Attack
  • Theft/lost your Hardware wallet.
  • Leakage of your Private and confidential keys.

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Bitcoin Security Measures

Be careful with online services.Remember,always prefer to use the cold wallet for the safe storage of your BitCoin assets. It's Better to keep a small amount of your Bitcoin on any hot or online wallet for everyday use .Why you are advised to keep a small amount in any online wallet because online wallets always assume a soft target of cyber players. Backup your entire wallet.To keep an extra backup of your wallets always provide an extra layer of security around your bitcoins assets.The mechanism of extra back up proved quite helpful and secure .Encryption of your wallets put you in a state of extra security and vigilancy reducing the possible threats of Online hacking. One of the most important things is your private key or password,Never forget your password or the private keys of your wallets in order to avoid any inconvenience and major loss. Offline wallets are always recommended for a kind of safe storage of your cryptocurrencies.While staying offline,minimize the chance of any theft or cyber attacks when you have saved everything offline. For better security of your BitCoin assets “offline transaction signing methodology” entirely rules out the concepts of any cyber attack.It provides the maximum and fool proof security to your valuables and eliminates the elements of online theft.For offline transaction signing different types of hardware wallets like ledger Nano S and trezor can be used.It will cost you around $70 but this amount is nothing against your Bitcoin assets.
The use of updated softwares always protects well against any possible malware threat.It has been observed on several occasions that the use of old or not updated softwares by the BitCoin Holders caused major loss and provided an easy hunt to the modern cyber players.Therefore it is highly recommended to use updated softwares by the time you access your BitCoin Holding online. Multi-signature methodology is also considered one of the safest criteria to store the BitCoin assets in the safest mode.It involves the signature of three or four different people before the final execution of your desired transactions.

  • Use Secure Internet.
  • Maintain Multiple Wallets.
  • Secure Your Personal Device.
  • Change Your Password Regularly.

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Don't Get Phished.

First we will define Phishing in simple words.Phishing is a kind of online attempt by any individual or group to steal personal information from unsuspecting users by employing latest social engineering techniques and methodologies. Phishing emails are intentionally crafted to appear as if these emails have been sent from a legal or legitimate organization.These emails often tempt the users to click on a link that will take the user to a fraudulent or illegitimate website that appears legitimate. The user then may be asked to provide personal detail and confidential information, such as account usernames and passwords, that can further expose them to future compromises. Additionally, these fraudulent websites may contain malicious code as well and eventually can cause major loss and inconvenience.

Moreover by following the below mentioned tips one can easily avoid phishing and ultimate loss.

  • Be careful and avoid social Engineering Phishing attacks.
  • Take special care of your personal and confidential privacy.
  • Please avoid visiting any suspicious or illegitimate websites in order to avoid any expected phishing attack
  • Stay in touch with anti phishing work groups,provide you the updated information about newly arrived illegitimate websites and their scams.
  • The function of the Federal trade Commission is to identify any illegitimate attempt of online theft or any phishing attacks. If you observe something unusual while you are connected to the internet, you are hereby advised, immediately contact and inform the Federal Trade Commission about that suspected activity.
  • By recognizing the email scams , one can always stay safe and protected being a BTC Holder against any possible online threat of Hacking and Malware.

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Check the authenticity of the wallet before parking your cryptocurrency.

Ensuring the authenticity of your wallet is no doubt one of the important measures you ever required to take while storing your BTC Holdings. As some recent reports unfold the story of fake wallets apps on Google play. ADA CarDano crypto wallet and All crypto Wallet were uploaded by a mysterious developer named crypto wallmart. Therefore it is advised to verify the authenticity of your desired wallets before storing your BitCoin Holdings.A verified wallet provider source is always recommended to be used either for hot or Bitcoin Cold storage Wallet Generator.

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What our Experts Recommend:

We do hope that the above explained information made you clear about the safe storage and possible threats to the security of your BitCoin Holdings .After providing the maximum useful and result oriented information we will advise our honourable readers and users to always opt the cold storage methods for the storage of your BTC Holdings , furthermore the method of Paper wallet, provides a “state of the art offline features” to store the BTC Holdings even for long term basis. More over the offline hardware wallets like Ledger Nano or the Trezor also provide the maximum safety measures against any possible threat of your Crypto currency.

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Your valuable feedback:

Your valuable feedback is always welcomed and we appreciate you staying in touch with us about our services and products. If you folks have ever gone through the experience of storing your BTC holdings either through Hot or Cold Wallets, we would appreciate having your personal comments on it in our comments section.

bitcoin wallet security issues measures and protection tips

Security Issues and Possible Risks Related To Bitcoin

This piece of writing highlights the unmatched basic characteristics of Bitcoin as a cryptocurrency and the expected security issues about the mining process and transaction methods of Bitcoin. In the current days, Bitcoin is no doubt emerging as one of the most successful and demanding cryptocurrency. Bitcoin actually records its transactions in a public log known as the Blockchain. The distributed protocols which are supposed to maintain the blockchain are ultimately responsible for the foolproof security and protection of Bitcoin. The blockchain is usually operated by participants identified as the miners. The Bitcoin technology - the protocol as well as the act of cryptography - got a unique and strong security record, and the Bitcoin network is usually known as one of the biggest distributed computing projects in the world. The security matters of Bitcoin are the vital areas of research. This digital currency might be vulnerable during the transactions or it can also face attacks on its online storage pools or digital exchanges. The recent researches, primarily focused on the protocol of Bitcoin, clearly explain that the cryptocurrency is not fully secure against the colluding groups of users that use different kinds of attacks to deceive the ‘Honest’ miners of Bitcoin.

Bitcoin is a widely known cryptocurrency that has recently emerged as a popular and frequently used medium of exchange, with a fully extensive and extraordinary ecosystem. This is usually considered as the decentralized peer-to-peer payment network that is powered by its users with no central authority or any middle person. Simplifying it, Bitcoin is a kind of cash on the internet. The Blockchain, that maintains the record of all transactions between cryptocurrency or Bitcoin clients. The security of the blockchain was established by cryptographic puzzles. The group of participants solving these cryptographic puzzles are called a miner.

Possible Security Threats

It is an established fact that Bitcoin is a digital currency that has no physical existence. The security issues of this digital currency have now become a matter of great controversy among the Holders of Crypto assets. All the initiatives and efforts made towards its foolproof safety and secure storage are no doubt appreciable but despite applying extraordinary safety features, some significant threats are still a matter of great concern. As several services offer the facility of an online wallet, however, some offer the offline storage facility as well but security threats still exist and can not be simply ignored. Some folks justify that the digital exchanges are a kind of safe haven for the digital assets and their safe storage but remember history always helps making future decisions and we cannot simply ignore the unfortunate incident of MT.GOX. However, keeping in view all the possible and major threats to the existence of this ever-growing digital currency, we will be explaining all of them so that our readers become vigilant and updated about its security threats and safety measures.

Expected Attacks on the Wallet Softwares:

The client-side applications are usually known as ‘wallets’ are actually used to manage the Bitcoins owned by the client as well as the transaction of the Bitcoins from/to the client. The client has two available options now, either he/she can avail of the online wallet services or he can select the wallet applications downloaded in his/her node. Honestly speaking, the online wallets are usually considered more vulnerable to attacks and thus need to be encrypted and backed off-line. Existing backup facilities authorizes the user to retrieve old wallet files, data, and its contents. The coin history is actually traceable that leads to link the user identity with the Bitcoin address. Distributed denials of service (DDoS) attacks are a kind of potential threat for the available online wallet applications.

Potential threats of Time Jacking Attacks:

Most of the time it has been closely observed that cyber players and attackers announce the inaccurate timestamp while connecting to a node for a transaction. The network time counter of the node is changed by the cyber attacker and the deceived node might accept an alternate blockchain. The serious and noteworthy consequences of this are double-spending and wastage of computational resources during the whole mining process.

>50%’ Attack (Major Threat)

This has been proved one of the significant threats for the security and safety of the Bitcoin network that ultimately hits the mining process. When any colluding user or group of users get more than 50% of the computing power in the mining process. This particular user or group of users can swiftly exclude, alter, and reverse the transactions and can also stop some or all ‘mining’ of valid blocks for their own desired benefits. Some latest and surprising researches have clearly proved that even with the 40% of computational resources, the attackers can easily get the control to a 6-deep confirmed transaction and that too with the 50% success probability. One possible and effective solution to avoid this inconvenience and reduce the dangerous effects is to establish checkpoints so that the blocks before checkpoints cannot be changed. However, if this attack goes successful, the attacker can easily surprise with another attack. The chaotic situations and maximum complications created in the network by the attackers sometimes become so difficult and almost impossible to handle and some changes made by the attacker may become irreparable.

Double-spending Element

The widely known double-spending threat can be a kind of major attack for the Bitcoin transaction in which the cyber players (attacker) successfully make more than one transaction using a single coin resulting in invalidating the ‘honest’ transaction. This type of attack is most likely to occur with the ‘Fast payment’ mode. In this attack, an attacker with a coin makes a transaction to the receiver and at the same time, the transaction with the same coin is made to some other address that might be in the control of the attacker or it may be in another receiving node. By varying the timestamp, the fraud transaction can be done quite easily as a real transaction. Since Bitcoin peers do not accept multiple numbers of transactions with the same input, they validate the transaction that reaches them first and thus invalidate all other transactions. Consequently, the real receiver might not be able to confirm its transaction. One possible solution for this attack is to insert the ‘observers’ in the network.

Selfish Mining Threat:

Selfish mining is greatly known as one of the newly researched characteristics of Bitcoin mining that makes Bitcoin vulnerable is known as ‘Selfish Mining’ that permits a pool of sufficient size to obtain revenue larger than its ratio of mining power. In this attack, the colluding group of miners will force the honest miners into performing wasted computations on the stale public branch. Generally speaking, the honest miners spend their cycles on blocks that eventually will not be part of the blockchain and they are forced by selfish miners to do so. The selfish mining group usually keeps their mined blocks private and thus confidentially perform bifurcation of the blockchain while the ‘honest’ miners continue to waste their computational power to the public branch. The selfish miners will then reveal the blocks to the public branch and the ‘honest’ miners will switch to the recently mined blocks which will make the selfish miner group earn more revenue. In simple words, selfish miners will work to invalidate the ‘honest’ miners’ work. The solution provided by Ittay Eyal and Emin Gün Srer of Cornell University shows that some fixation is urgently required in the Bitcoin protocols to minimize the success probability of selfish mining.

Last But Not Least:

Bitcoin is a well known successful and practical implementation of the concept widely known as Cryptocurrency but having said that all its secure existence is still a great challenge to the whole world therefore, developers are continuously working hard to overcome the element of the vulnerability of the Bitcoin. The major and potential threats for Bitcoin are its vulnerability in the mining process and transactions and lack of security during the storage of the coins on the online pools. The mining process of Bitcoin is greatly vulnerable and under the attacks like ‘>50%’ as well as ‘Selfish-mining’ attacks.
To provide foolproof security against all possible and potential threats, the framework of Bitcoin protocols needs to be changed and since Bitcoin is a decentralized cryptocurrency, the protocols are accepted by all the users and to change the protocol set of Bitcoin, the agreement of a majority of the users(approximately 80%) is needed. Thus, the implementation of advanced Bitcoin protocol security seems somewhat complex.

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