Bitcoin investors are being advised about the danger from hackers focusing on cryptocurrency exchanges
Bitcoin prices never stops to fluctuate, with the value of the cryptocurrency falling since the time it hit a record high of above £14,000 last December.
And as people continue to rush in to invest in Bitcoin, it becomes important to ensure your money is safe and protected.
Cryptocurrency exchanges in past times had been hacked, with thousands of Bitcoin lost into theft – which would figure to millions of pounds this present time.
In December 2017, South Korean cryptocurrency exchange Youbit filed for bankruptcy after being cyber-attacked which saw 17% of its assets ripped off.
And since Bitcoin transactions can’t be reversed, if your wallet is emptied you will simply not be able to be refunded.
However, there’s a way for Bitcoin investors to safeguard against this.
Security professionals are suggesting Bitcoin fans save their coins in an offline ‘cold’ wallet, The Independent reported.
Bitcoin investors who procure the cryptocurrency via an online exchange and save it there leave the protection of their investment in the hands of that site.
If such cryptocurrency exchange gets hacked, where there has been a handful number of high-profile incidents, then your Bitcoin could be stolen.
The exchange retains investors’ private keys, and if a hacker lay their hands on it then they may have access to victims’ cryptocurrency holdings.
Last December, up to 4,700 Bitcoin was ripped from digital currency marketplace NiceHash.
Using the prevailing value of Bitcoin, the amount of cryptocurrency stolen figures to over £46.2million.
In order to keep an investment safe and protected, Bitcoin investors are being warned by security professionals to save their money offline in a ‘cold’ wallet.
This may be a USB, an external hard drive or even on a piece of paper kept in a secure place.
In an interview with The Independent, Kaspersky Lab’s Alexey Malanov said: “The ever-rising value of cryptocurrencies, especially bitcoin, makes them a very appealing target to cybercriminals, who use different ways to get their hands on them.
“There have been a number of big hacks of cryptocurrency exchanges way back and the trend will only continue.”
While Symantec threat researcher Candid Wüest also said: “The most secure way for users to save their bitcoin is using offline wallets which are not connected to a computer systems.”
Cameron and Tyler Winklevoss, who excellently fought a legal battle with Mark Zuckerburg over the Facebook ownership, reportedly have more than a billion dollars worth of Bitcoin.
They save their wealth in a ‘cold’ wallet, and their private keys penned on pieces of paper that are being cut up and placed in banks all over the world.
One person who is not cajoled by Bitcoin is titanic investor Warren Buffett, who has predicted the increase of cryptocurrencies will not end well.
He said: “In terms of cryptocurrencies, publicly, I can say with confidence that they’ll come to a bad ending.
“The time this happens or how or anything else, I do not know.
“If I could purchase a five-year put on all the cryptocurrencies, I would be happy to do it but I’d never short a dime’s value.”