How hackers can steal your Bitcoin and other cryptocurrencies

At the beginning of December, news broke about $64 million in cryptocurrency that was stolen in a sophisticated hack.

This is because while blockchain, the technology underlying bitcoin, is widely thought to make breaches impossible, there are ways to get around it, said Martin Walshaw, senior systems engineer at F5 Networks.

“The business of bitcoin is based on blockchain technology. At a time of widespread uncertainty and distrust in many areas of the digital economy, blockchain’s central promise of ultra-secure measures for certainty and authenticity is an incredibly compelling proposition,” he said.

“However, for many experts, blockchain continues to have a range of limitations. Analysis from the Open Data Institute (ODI) has highlighted a range of potential security stumbling blocks, including interoperability, privacy issues and the need to find information within the blockchain.”

In addition, many application developers are still failing to write APIs with security embedded, Walshaw said.

“This puts both the application and the underlying data at risk. Better code means better confidence as the need for greater transparency, combined with emerging business models built on blockchain technology, will drive more organisations to safeguard data and improve overall application security standards.

“Users of bitcoin should be well advised to do their due diligence before making investments. Having a secure and versatile application program interface (API) will give users complete control and flexibility over the performance and integrity of vital applications.

“In the wake of recent high-profile breaches, now is the time for users to protect their passwords and be vigilant with on-line behaviour.”

Read: $60 million worth of bitcoin stolen in NiceHash hack

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