Has Bitcoin ever been hacked?
Plenty of people have had their Bitcoins hacked, but the Bitcoin network itself has never been hacked. Make sense?
The Bitcoin network is robust and decentralized. Until this point, it hasn’t experienced any security breaches.
That being said, there have been instances where bitcoin exchanges have been hacked, and depositors have lost pretty much all their bitcoins.
Major crypto hacks
The most infamous example of this happening was in bitcoins’ early days on an exchange called Mt. Gox. As a result of the Mt. Gox hack, depositors lost 850,000 bitcoins, which at the time was estimated to be worth 450 million dollars.
At today’s rate (approximately $21,000 per Bitcoin), those 850k bitcoins would be worth almost 18 billion dollars. Ouch!
A similar, high profile incident happened with Ethereum in 2016. This is known as the “DAO hack”. The DAO, which stands for decentralized autonomous organization, was a venture capital fund built on the Ethereum blockchain.
A hacker was able to exploit a vulnerability in the smart contract and steal 3.6 million Ethereum tokens. This lead to a “hard fork” of the Ethereum blockchain. This is why we now have two Ethereum’s. Ethereum and Ethereum Classic (the original).
There are, of course, several other examples of exchanges getting hacked. However, that doesn’t mean that there’s anything wrong with the blockchains themselves though. There’s a big difference between a centralized exchange (like Mt. Gox and FTX), and the decentralized Bitcoin network – though people often confuse the two.
For example, recently, after the FTX collapse, there were many people who were saying how insecure crypto is. What they don’t realize, however, is that the entire purpose of crypto is to eliminate the need for centralized financial entities like FTX.
Ironically, Bitcoin, and other cryptocurrencies (held in self custody) is the SOLUTION to bad actors like FTX founder, Sam “Bankman” Fried. We no longer have to trust shady people like that with our money. I don’t know why anyone ever trusted him in the first place.
The good news, however, is that people are finally starting to wake up to the risk posed by centralized exchanges and they’re deciding to take self custody of their coins and get themselves a hardware wallet for maximum security.
To learn about which self-custody crypto wallets are the best, read this article.
How people usually get their cryptocurrencies hacked
When people get hacked, it’s usually due to one of the following reasons..
- Phishing scams: Hackers tricked users into giving away their private keys or seed phrases through fake websites or emails.
- Malware: Hackers infected a user’s device with malware that can steal their private keys or seed phrases.
- Social engineering: Hackers tricked users into giving away their private keys or seed phrases through manipulation or deception.
- Exchange hacks: Hackers targeted the centralized crypto exchanges. Some of these instances could possibly be an inside job.
- Weak passwords: Hackers use brute force methods to guess users’ passwords.
- Unsecured connections: Where users connect to public Wi-Fi networks that are not secure. We recommend using a VPN on public connections.
- Careless storage of seed phrase: Anyone who has your seed phrase/private key can access your coins. Be careful where you store it.
Summary
No, the Bitcoin network hasn’t been hacked.
Yes, it has proven itself to be secure up until this point.
When people have their crypto stolen, it’s usually a result of carelessness. Be aware of the 7 points discussed above and protect yourself.
The best thing you can do to secure your crypto is to get yourself a hardware wallet, keep your password to yourself and protect your recovery phrase.
