CRYPTOCURRENCY VS Money in the Bank

Is Your Crypto Safe?

A SECURITY ANALYSIS

Introduction

Cryptocurrency and Blockchain have been all the buzz on popular media for the past couple of years since the price of Bitcoin shot up and investors swarmed over this new digital currency . Many startups have been founded based on blockchain technology. Nonetheless, even with so much enthusiasm, many investors are still uncertain of the security of the currency . Is cryptocurrency hackable? Is having some dollars in your bank account really safer than having some bitcoin in your online wallet? That is the question we look into today.

So first to tackle the above topic, let’s talk about some fundamentals of cryptocurrencies and why they are considered secure and then we will discuss their shortcomings. Cryptocurrencies are blockchains which work on distributed networks. Now, just suppose that I am a hacker and I want to perform a “man-in-the-middle” attack while sender A is transferring BTC(bitcoin) or some cryptocurrency to receiver B. Basically I just intercept their connection so that A sends BTC to me instead of B.

So can I do it? Yes. Will it work? No.

You see ,cryptocurrencies have something called “hash” attached to their transaction by the initiator automatically, and if anyone changes the transaction in between, then the hash value doesn’t match with the transaction .When the chain is validated against all the distributed network across the ledgers, it will simply pop-up as irregular and henceforth be discarded. What it means is that, a single computer will be fighting against all the computers on the network if they want to make the transaction valid and transfer the BTC to the attacker’s account.[1]

Cryptocurrencies go through the complete check every single time a new transaction is made and verifies the validity of the block against other nodes.

However, in spite of all these checks, cryptocurrencies do get stolen.

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