Oftentimes Bitcoin is referred to as being unhackable. After all, it hasn’t been hacked since its inception in 2009. This is certainly an impressive record and further backs the claim.

That being said, this claim is not 100% true. Bitcoin can be hacked however it is largely unpractical and costly. In this article, I will be explaining why bitcoin is hackable as well as the security it has to prevent hacks. So without further ado, let’s jump right in.

TL;DR:

Bitcoin is not unhackable. However, it is extremely costly to hack it. This is because it requires bad actors to obtain the majority of the hash power to perform a 51% attack. Ultimately, this costs billions of dollars.

Is Bitcoin unhackable?

Bitcoin’s main attack vector is through 51% attacks. This term refers to bad actors controlling the majority of the computational power of the network.

As a result, Bitcoin can be hacked as the bad actors have consensus over the network. At this point, they can alter and delete transactions. That being said, this process is largely impractical.

It would require malicious actors to obtain the majority of the Bitcoin hash power. This would require billions of dollars of investment in computational power with little reward. After all, if the network did suffer a 51% attack it would collapse in value immediately.

So although in theory Bitcoin can be hacked it is extremely unlikely.

3 Reasons Bitcoin is difficult to hack

1. Robust cryptography & immutability

Bitcoins hash function is cryptographically secured via 256-bit SHA. This is a state-of-the-art cryptography technique is employed by both the military and VPNs.

All in all, this provides enhanced security that is almost impossible to hack. Not to mention, once data is added to the blockchain it becomes immutable. It cannot be altered or changed and thus counteracts any manipulation.

2. Decentralized nature

As the network is secured by a decentralized network of computers there is not a single point of failure. Moreover, transactions are only implemented if the majority of nodes agree that they are valid.

As a result, hackers have to target multiple participants to gain control which requires considerably more effort and cost than centralized alternatives.

3. Transparency 

The complete transaction history and the underlying code of the Bitcoin network are openly verifiable. This highlights any malicious activity and guarantees authenticity. Anyone can view the blockchain information therefore anyone can see potential attacks.

In other words, Bitcoin’s network provides an unquestionable audit trail that has transparent shared trust.

If Blockchain is unhackable, why have so many cryptocurrency companies and customers been hacked?

Although the underlying technology is unhackable the surrounding infrastructure is susceptible to them. This is mainly due to poor private key storage and the use of centralized technologies.

For instance, if you store your seed phrase or private key in an insecure location then hackers can access it and gain control over your wallet. This is no fault of the bitcoin network, rather it is user error.

Other notable hacks include phishing scams, fake websites, and malware. Therefore it is imperative to use a hardware wallet to store your keys offline. The hardware wallet that I recommend is the Ledger Nano X. You can check out my review here.

When it comes to crypto companies these are often based on centralized technology. For instance, sensitive information is stored in databases and servers rather than on the blockchain. 

This provides a honey pot for hackers to attack and exploit. Similar to the previous point this is not a fault of blockchain. It is a complete opposite system that is controlled by a central entity.

If you want to view this article in a more visual format then please check out my video below:

Conclusion

As you can see, Bitcoin is not unhackable however it is virtually impossible to do so. This is largely thanks to its decentralized nature, transparency and cryptography.

Not to mention, as the network develops it continues to become more secure as hashing power increases. That being said, there is always the possibility for participants and companies to lose funds via external infrastructure and user error.

Therefore, it’s important to do your due diligence when interacting with the Bitcoin network and secure your private keys. I hope you found this article useful and thanks for reading it.

Want to learn about Bitcoin unrealized price? Click here to check out my previous article.