How to protect bitcoin and other cryptocurrencies

1) Private key, public key, address

Just as you need to enter a password for bank withdrawals and online bank transfers, a password is also required to use bitcoins in your wallet. This password is called a “private key”.
The “private key” corresponds to the “public key”, and the “public key” is like your bank account.

Each bank account has a unique account number, which is the bank card number.

In the Bitcoin network, that bank card number is the “address”.
If you find a piece of paper on the road with only the bank card password written on it, but not the bank card number, even if the card password is true, you will not be able to withdraw money from the account in question.

Why is this so?

This is because in the blockchain, the private key is encrypted to generate the public key and the public key is converted into the format to generate the address.

In other words, the private key can derive from the public key and the public key can derive from the address.

2) Reverse derivation? No way!

Since “the private key can derive the public key, and the public key can derive the address”, you must enter the “password (private key)” to use the bitcoins in your account, so the hacker must steal the bitcoins in your wallet. Just get the “private key”.

In theory, hackers can steal your private key in two ways:

  1. Reverse the private key by means of the address / public key.
  2. Try the private keys one by one, that is, cracking with brute force.

The first method is not viable, as the encryption algorithm used by Bitcoin is “a small mistake, a big difference!”.

Even if the input content changes slightly, the output result after encryption is very different from the previous output result and these results have no rules to follow.

Therefore, this encryption algorithm is “one-sided” and “irreversible”, and hackers cannot deduce the input (private key) from the output (address / public key).

3) How difficult is it to use Bitcoin’s private key by brute force?

Since the first method is not viable, how about the second method?

Before answering this question, let’s take a look at how the private key is generated.

Suppose you flip a coin, face up is 1 and the reverse is 0. Play 256 times in a row. Record the result of each bid and convert it to a hexadecimal number, which is a Bitcoin private key.

What? So simple? So capricious?

That’s right, Bitcoin’s private key is generated randomly through the “256 coin flips” program.
Therefore, even if a hacker has a supercomputer, he cannot use brute force on Bitcoin’s private key.

That is why many people say, “Bitcoin guarantees the sacred inviolability of personal private property for the first time by technical means.”

4) If it is better than a super computer?

While no one can accurately predict how the future of science and technology will develop, if humans ever invented a computer even more powerful than supercomputers and quantum computers, wouldn’t Bitcoin’s private key be insecure?

  • Click the button below to learn more about the issue of quantum computers and a threat to bitcoin

As long as others know your “bank card number” (ie the address), they can transfer bitcoins to you.

Be careful when using online services
You must be careful with any service used to store your funds online. Many online foreign exchange and wallet services have had security vulnerabilities in the past, and these services are generally still unable to provide the same level of fund storage security as banks.

A small amount of Bitcoin is used for daily needs
A Bitcoin wallet is like a money wallet. If you don’t have thousands of dollars in your pocket, you should have the same concerns about your Bitcoin wallet. In general, a good strategy is to store only a small amount of Bitcoin on your computer, mobile device or server for daily needs and store the rest of the funds in a more secure environment.

Backup your wallet

Keeping your wallet backed up in a safe place will protect it from computer crashes and many human errors. If you have encrypted your wallet, it can also be used to restore it when your phone or computer is stolen.

Encrypt your wallet

After encrypting the wallet or smartphone, anyone will be asked to enter a set of passwords that you defined when operating the funds transfer. This can prevent theft, but it should be noted that this is not valid for key recording hardware or software.

Offline wallet storage

Offline wallets are also called cold storage and can provide the highest level of security storage. It involves wallet storage in a secure environment without a network connection. If handled correctly, it can provide very good protection against computer security vulnerabilities. It is also a good practice to back up and encrypt offline wallets. Below is an overview of some methods.

Update the software to the latest version

The latest version of the Bitcoin client already provides important stability and security fixes. These updates can avoid a variety of serious problems and contain useful new features, but they also help to keep your wallet safe. To make the wallet environment more secure, it is also important to install updates for all other software on your computer or cell phone.

Multiple subscription to prevent funds from being stolen

Bitcoin has a multi-signature function, which requires a transaction to be completed after obtaining several independent permissions. An organization can use this function to allow its members to access its assets, but only after 3/5 of the members have signed the transaction can it withdraw funds. Some web wallets also provide wallets with multiple signatures, allowing users to keep track of their money, while preventing thieves from stealing funds by hacking into a single device or server.

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We recommend reading our other posts so as not to be fooled when buying your precious Bitcoins.

Still have doubts? Contact us, we will be happy to help you.

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