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Is Bitcoin being hacked? A simple answer


The success of Bitcoin as the king of digital currencies in recent years has led to an influx of traders and investors to buy and hold bitcoin. As the bitcoin community grows and newcomers enter the field, the question for new users is, is bitcoin really safe? Is it possible to hack bitcoin? In this article, we will answer these questions and point out the types of attacks that may be carried out against the Bitcoin network.

“Hack” or hacking means using a quick and smart way to solve a problem in the computer, but in today’s conversations, so-called hacking into a computer system is called hacking.

Hackers usually attack a centralized computer, or so-called server, to infiltrate a system in order to manipulate the data to change the data in their favor or for a specific purpose.

But Bitcoin is a digital currency implemented in the context of China’s blockchain technology in a completely “decentralized” way. In fact, there is no centralized computer or server to infiltrate the Bitcoin network. Security and resistance to hacking is one of the advantages of Bitcoin and other digital currencies over Fiat currencies.

The existence of thousands and millions of miners or miners has forced hackers to hack a “decentralized network” instead of hacking a server to hack the bitcoin mechanism. So how can bitcoin be hacked? Is such a thing possible? How successful can an attack on a decentralized network be?

Cyber ​​attacks on bitcoin

cyber attack

The decentralization of the Bitcoin network protects it from many attacks. But this does not mean 100% security. On paper, in theory, it is possible to attack bitcoin and even hack it. So far, there have been many attacks on the Bitcoin network. Some of these attacks have been in the form of media wars and some in the form of legislative repressions. But in terms of cyber and infrastructure, what attacks can be made against bitcoin?

Zero Day Attack

One of the most important cyber attacks that may be carried out by hackers to destroy or weaken the Bitcoin network is an attack called “Zero-day attack”.

Zero Day attack uses a potentially severe security vulnerability in software that even the developer himself is unaware of. One of the most common targets for zero-day attacks is the Internet of Things (IoT).

The zero-day attack is not a potential threat, but an actual threat to Bitcoin. This is really what happened to Bitcoin, and in the history of digital currencies it has been referred to as the “Value Overflow Incident”.

Value overflow accident

On August 15, 2010, one of the users «Bitcoin VineWith the username “jgarzik” noticed a strange case in the Bitcoin network. Block 74,638 recorded two transactions in which more than 92 billion bitcoins were exchanged! He immediately raised the issue in the Bitcoin Talk forum Reported:

The first user to notice bitcoin being hacked
The first user to notice that Bitcoin was hacked

Further investigation revealed that an anonymous hacker had almost destroyed the bitcoin! The hacker was able to generate more than 184 billion bitcoins from nothing in a few moments. While the original code stipulates that only 21 million bitcoins will be mined. This means that the hacker was able to enter the cycle of counterfeit coins as much as 8,784 times the total bitcoins.

The only thing that saved Bitcoin from premature destruction was the quick reaction of Satoshi Nakamoto, the anonymous creator of Bitcoin. Three hours after the report, Nakamoto, with the help of Gavin Andresen, a Bitcoin developer, was able to fix the bug. He quickly created a hard fork (extensive upgrade) and in the new chain destroyed all the coins created by the hacker.

In the hours following the incident, two bitcoin networks were operating due to Nakamoto updates, and a large number of miners were mining the faulty chain. But according to Nakamoto, 19 hours after the hack, all the miners left the defective chain and entered the new chain.

This attack was one of the greatest blessings for this digital currency in the early days of Bitcoin. If in those days no one noticed this software problem and this attack happened a few years later and in the days when the price of bitcoin reached several thousand dollars, and its market value reached tens of billions of dollars, the price of bitcoin would probably be close in a few moments. It was zero.


There are other ways to damage bitcoin. Although these attacks can not be considered “hacked” technically, such attacks can lead to damage such as slowing down the network or losing the validity of Bitcoin. This includes spam attacks, 51% attacks and hacking of Bitcoin-related platforms.

Spam attacks

“Spam” refers to the misuse of Internet tools such as e-mail, social networks, messengers, and ارسال to send countless messages to those who have little or no interest in receiving those messages.

Spam
Spam

In the world of digital currencies, spammers try to slow down the network by creating huge volumes of transactions. The bitcoin code provides a solution for this issue and transactions with zero comma are rejected by the network. So the only way for spam to attack Bitcoin is to register many transactions with a reasonable fee that have no economic justification.

As the network slows down, transactions are confirmed later than usual, which discourages users. The people who make the most of spam on the Bitcoin network are fans of some bitcoin altos and forks. The purpose of some of these spammers is to frustrate users with bitcoins and redirect them to other coins.

If an attack in the form of spam coincides with periods of increased demand for transactions on the network (such as days when large price changes occur), it will have a devastating effect on network performance and will most likely drastically slow down transactions. کرد.

The development of strategies such as Segway and Lightning, which improve network scalability, can eventually protect bitcoins from spam. This is because improving the scalability will increase the cost of spam and reduce the motivation of attackers to attack the network.

But spammers can also find ways to increase the cost of spam. That way, if too many miners work for spammers, they can spend their mining profits on spam. But why does this not happen?

During a spam attack, the network speed is drastically reduced and the transaction confirmation cost is increased. These two factors can cause a sharp drop in the price of bitcoin. As the price of bitcoin falls, the mining rewards will be reduced to the point where mining is virtually unaffordable. This way, if the miner who works with the spammer fails to pay for the spam, the attack will fail.

51% attack

The 51% attack indicates a situation in which some miners or mining pools are trying to gain the majority of bitcoin network alerts. In order to launch this massive attack, one must provide a great deal of energy and processing power, which must be greater than the total energy consumption of all the miners currently mining bitcoins.

In other words, someone who wants to launch a 51% attack must have a hash rate equivalent to the current network hash rate. The number of bitcoin miners in the world is now very high and the mining machines are becoming more powerful day by day. As a result, the bitcoin network hash rate has risen dramatically.

51% attack
51% attack

Although a 51% attack on bitcoin is possible on paper, with the current strength of the network, such an attack would not be possible in practice. Trying to score this attack requires spending energy and money beyond imagination.

However, someone who can own 51% of the network can:

  • Use a coin twice.
  • Prevent transactions.

But a 51% attack does not mean the complete destruction of the network. Someone with 51% of the network hash rate can not:

  • Return previously approved transactions.
  • Make unrealistic transactions (which did not exist before).
  • Steal assets from a specific address.
  • Generate new coins.

Wallet and exchange hacking; Like hacking a site on the internet

As mentioned, bitcoin hacking and blockchain is virtually impossible. But the platforms that users use; Like wallets and exchanges, they can be hacked and have been hacked many times.

One of the largest exchanges attacked by hackers is Cryptopia, Bitfinx, Amtigox, Quinchek, Appbit and Bainance. You can read a very long list of news about the hacking of various exchanges in Digital Currency.

Hacking digital currency exchanges
Hacking digital currency exchanges

In addition to money changers, bitcoin wallets are a good prey for hackers and, like money changers, have a bad track record. If someone can access the public and private keys of your wallet in any way (including phishing) at the same time, practically all the assets of that wallet will be available to them. Of course, this is limited to online wallets, especially web wallets. Hardware wallets such as Ledger, Treasury and Kipki are very secure.

Hacking a wallet or an exchange office is not uncommon, and news of these attacks can be found on a daily basis in digital currency news agencies. But keep in mind that hacking exchanges and wallets does not mean hacking bitcoins and the Blockchain network, just as hacking a site does not mean hacking the Internet.

Conclusion

Bitcoin network security is one of the main concerns of digital currency users. Although this network has a very high level of security, it is always attacked by hackers. The first and last successful action in this case is known as the “value spill incident” that occurred in 2010. Apart from this, over the past decade, Bitcoin has proven itself well against cyber attacks.

Bitcoin wallets and exchanges have been repeatedly attacked by hackers, and some of these attacks have been successful. But this is not a sign of the vulnerability of the Bitcoin network and its blockchain, but the weakness of bitcoin-related platforms.

There may be other attacks, such as the 51% attack and spam attacks on the Bitcoin network. These attacks are not technically hacked but can call into question the speed and credibility of the network.

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