Can a cryptocurrency like Bitcoin be hacked or overridden?

Due to its decentralized and distributed nature, blockchain technology is well-suited for preventing hacker attacks.

• One of these doomsday scenarios would be known as a 51% attack.
• Bitcoin has not been hacked since its creation
• Interfaces, such as wallets, where cryptocurrencies are handled remain vulnerable to attack
• Rather, people and websites have been hacked as they are much easier targets.

In this article, you will learn why it is difficult, yet possible, to hack a blockchain.

Why can Bitcoin be considered "hacker-proof"?

Bitcoin is considered hacker-proof because the Bitcoin blockchain is constantly reviewed by the entire network.

Therefore, attacks on the blockchain itself are highly unlikely. To add a new block containing a set of transactions, each participant (miner) who updates the Bitcoin record is continually solving complex mathematical problems. 

These complex mathematical problems are created by the Bitcoin encryption hash function. If a specific block is added to the database, each network node has to agree on the validity of that block. The Bitcoin registry is only updated if all the nodes agree. 

Manipulating a cryptocurrency network is extremely difficult. Deleting or overwriting an already spent Bitcoin block, to create “ double spending ”, is made impossible by the decentralized, chronological, and high-power computing characteristics of the Bitcoin blockchain. 

What happens when someone tries to hack the Bitcoin blockchain?

As you already know, there is no single copy of the Bitcoin blockchain . On the contrary, there are thousands of copies stored in nodes of a computer network. These nodes are distributed all over the planet and contain all the Bitcoin transactions that have taken place so far. 

A hacker who wanted to tamper with the distributed ledger of Bitcoin or any other network based on blockchain technology would need to hack not one, but more than half of the participating computers (a 51% attack).

What is a 51% attack?

A 51% attack is quite possibly the most significant threat to blockchains. Such a scenario would look like this: If a single individual or organization were to succeed in taking control of the majority of mining power networks (hashrate), they could theoretically change and overwrite the network's transaction history. of Bitcoin.

A majority (hence 51%) is always required to decide which transactions to approve and which to reject. This means that a 51% majority could potentially alter a blockchain's distributed ledger in a way that would enable double spend (execution of the same transaction multiple times). However, this situation is extremely difficult to achieve and highly unlikely to occur. 

Just as Bitcoin has never been 51% successfully hacked, it has also never been shut down, even for a short period of time.

Can Bitcoin be bypassed/turned off?

Just as Bitcoin has never been 51% successfully hacked, it has also never been shut down, even for a short period of time. Many players, such as government institutions and bank officials, have predicted the shutdown of the Bitcoin network before, but Bitcoin has been running at almost 100% for almost ten years.

In truly extreme circumstances, there are few situations that could bring about the end of Bitcoin as we know it. For example, a massive global power outage that shuts down all communications and brings down the internet worldwide could prevent network nodes from contacting each other, resulting in system failure.

Situation Two: A Bitcoin update contains a critical bug that remains undetected despite the intense testing and peer review inherent in the Bitcoin protocol. This situation is very likely to lead to a temporary deterioration of the network and, consequently, an abrupt drop in the price of Bitcoin and a fork of the blockchain. 

Since Bitcoin is decentralized, the network itself cannot be shut down by a government. However, governments have already tried to ban cryptocurrencies or at the very least restrict their use in their respective jurisdictions. Governments could continue to try to jointly ban Bitcoin. However, in the long run, governments are much more likely to impose regulations to protect individual investors and to collect taxes. 

There is also the scenario (albeit unlikely) of a 51% attack. 51% of the network participants would have to join forces to bring down the Bitcoin network, thus jeopardizing their own profits. Since this scenario would also require huge investments in mining equipment , the attack is also highly unlikely.  

Furthermore, new and supposedly improved cryptocurrencies are introduced to the markets almost daily. These developments carry the danger of market fatigue when it comes to investing. It means that if everyone has bought an asset, there are no more buyers to sell to when they want to, leading to a decline in price.

However, Bitcoin has been around for almost ten years and is very likely to retain its reputation and value. 

Bitcoin has been around for almost ten years and is very likely to retain its reputation and value 

Why are coins stolen?

Most of the security issues in the cryptocurrency space can be attributed to people and websites not taking the right precautions. When credit is stolen, it is often because cryptocurrencies are stored in places that are simply not secure. 

For example, a "hot wallet" is any crypto wallet that is connected to the Internet or is "online" in some way. Hot wallets are wallets on desktop or mobile devices, as well as wallets hosted on exchanges without the most advanced security measures. A hot wallet can also consist of wallet private keys that are carelessly stored on a compromised and hackable device.

When credit is stolen, it is often because cryptocurrencies are stored in places that are simply not secure. 

Most likely, the Mt. Gox hack is the leading example of poor security and led to the largest cryptocurrency theft. Mt. Gox was an exchange founded in Japan and relocated to another Bitcoin exchange in 2010. Due to insufficient security measures, hackers managed to steal more than 850,000 BTC. The Mt. Gox hack is the biggest since the inception of Bitcoin and led to the bankruptcy of the stock market in 2014.

Fortunately, other exchanges around the world learned of this incident. Since then, many of them have implemented watertight security features. Even so, we recommend all cryptocurrency users to practice safe habits and read our article on safe storage of your cryptocurrencies . 

After a successful bullish market last year, the prices of major cryptocurrencies like Bitcoin and Ethereum have been plummeting this year, leaving people wondering about their crypto investments. In this article, we’ll explain why is crypto crashing and what you can do to survive in this crypto winter.

In any case, distributed ledger technology and the blockchain are some of the most secure and powerful innovations known to date. The Blockchain brings unprecedented application possibilities, many of which are still waiting to appear.