Those who got in the cryptocurrency wagon early are reaping huge rewards when prices double or triple within a few months. Bitcoin uses blockchain technology to record transactions. When you open a Bitcoin account, you are issued with a private key that you can store on your e-wallet. Some of the companies operating this service keep private keys of their customers, and this makes them susceptible to attacks from hackers.
But it is the trend where customers lose their Bitcoins to hackers that is causing many to be worried. The internet is awash with stories of people losing their coins to fraudsters whenever they lose their private keys. Most Bitcoin experts’ advice is that the best way to protect your pin is to use what they call a hardware wallet. This is usually a USB stick that you can store your private Bitcoin keys. The wallet is not connected to the internet, which makes it inaccessible to hackers. You can purchase these devices in various online stores like Amazon.
Trezor is one of these hardware wallets. Once you purchase it you will be asked to create recovery words which will be used should you lose your USB. The 24 recovery words will also be used to generate your master private key. However, if someone stole the paper that you had written the recovery words on, they can use them to hack into the system and steal your bitcoins. The problem with the hardware wallet is that you need extra PINs to guard other PINs. If you lose the paper where you had wrote down your PINs, then you are in big trouble.
Bitcoin – unlike your local bank where you can call to secure your funds if you lose your PIN – is controlled by thousands of computers running software. Anyone can participate in Bitcoin transactions if they have the right software. One careless person losing their password seems inconsequential in the network. Since it’s decentralized there is no central authority to listen to your concerns – you are on your own. Once you lose your password on a device like Trezor, it can be hard to recover it, and this can lead to you losing thousands of dollars worth of Bitcoins from one simple mistake.
There are hackers online who claim to have the ability to hack into any hardware wallet, but you have to take any information from them with a grain of salt. It can be torment losing your Trevor password with no visible signs for recovery. Some who have tried recovery options have used various Linux commands. The hack works by exploiting the hardware wallet static RAM which is usually in an unencrypted form. By doing a soft reset, you are able to short the PINs. By installing an exploit firmware, you can then see you PIN and SEED numbers.
All this proves one thing: there is no foolproof plan to secure your PIN. You can use the so-called hardware wallet but even it is subject to hacking. But with advancements in technology, we hope that we will one day discover a fool-proof plan to secure Bitcoin passwords.