Are you interested in purchasing Bitcoin? If so, it's essential to understand the potential security risks surrounding it. With cybercriminals ramping up their attacks, cryptocurrency will likely be a target. Here's what you need to know.
Wallets Carry Risks
Cryptocurrency enthusiasts use both hot and cold wallets to store their Bitcoin. A hot wallet has an internet connection, which makes it potentially hackable. You might wake up one morning to find your funds depleted by an infiltrator overnight. A May 2019 cyberattack on a Binance hot wallet led to a theft of $41 million[1]—more than 7,000 Bitcoin.
Storing your Bitcoin in a cold wallet—one without an internet connection—does not make you free and clear, however. Take the example of Gerald Cotten, a cryptocurrency exchange CEO who passed away while being the sole holder of passwords to his accounts. That situation restricted access to approximately $137 million in cryptocurrencies[2] held in cold wallets and owned by about 115,000 customers.
When experts eventually took Cotten's laptops, they found that someone emptied the wallets about eight months before the CEO died. That revelation caused some people to wonder if he faked his death and ran off with the funds.
Stolen Data May End Up Sold
Most tech-savvy people know that one of the consequences of being an internet breach victim is that their data may end up on the dark web, sold to any party willing to pay the price. That outcome can happen with cryptocurrency details, too.
Reporters said that the hacker allegedly behind the infiltration of Ethereum.org took information from customers associated with several leading cryptocurrency wallet brands. The cybercriminal has three databases collectively containing information from 80,000 people[3], including emails, home addresses, and phone numbers.
Although the hacker did not
