What methods are used to hack cryptocurrencies?
There are various methods by which a cryptocurrency can be hacked. While the blockchain itself usually remains secure, attacks often target wallets, crypto exchanges or bridges between blockchains. Particularly common are wallet hacking, attacks on crypto bridges, exchange hacks, phishing, malware and stolen keys.
We have summarised the most important attack methods so you understand where the biggest risks lie and how you can protect yourself.
Wallet hacking
Wallets are a popular target for hackers as they allow direct control over cryptocurrencies. Hot wallets, which are constantly connected to the internet, are especially at risk. Hackers use malware, insecure apps or phishing attacks to steal private keys and gain access to assets. A compromised key usually means the complete loss of the cryptocurrency, as transactions on the blockchain are irreversible. Bitcoin, Ethereum and other currencies have already been stolen in attacks totalling millions.
Secure wallet use, two-factor authentication (2FA) and cold storage, which is storing coins in an offline wallet, can minimise the risk.
Attacks on crypto bridges
Crypto bridges (cross-chain bridges) enable the transfer of cryptocurrencies between different blockchains but are often a major security risk. Attackers exploit smart contract vulnerabilities, security loopholes or manipulated transactions to steal assets. In recent years, billions of dollars have been stolen through attacks on bridges like Ronin, Wormhole or Nomad Bridge.
Affected users were mostly unable to recover their stolen tokens. Such hacks show that not only individual wallets or crypto exchanges are targets of attacks, but also decentralised systems.
To protect yourself, use bridges for cryptocurrency transfers with caution and always check their security measures before transacting.
Hacking of crypto exchanges
As crypto exchanges like Binance, Bybit or Coinbase manage large amounts of cryptocurrency, they are an especially attractive target for hackers. Attacks often occur via platform vulnerabilities, data leaks or stolen login credentials. In the past, millions of dollars have been stolen through exchange hacks, such as those involving Mt. Gox or Coincheck.
A successful hack can result in users losing their deposits if the exchange does not offer reimbursement. Therefore, it's wise not to store large amounts permanently on an exchange, but instead use a personal wallet to store Bitcoin or other cryptocurrencies.
Phishing
Phishing attacks are one of the most common reasons why cryptocurrencies like Bitcoin are hacked, mostly via users’ wallets. Hackers pose as legitimate platforms and lure users to fake websites to steal login details or private keys. Even though the Bitcoin blockchain itself is barely hackable, attackers can compromise individual wallets through phishing and thereby gain access to BTC.
Such attacks can be identified by the following characteristics:
Unusual requests: If a platform suddenly asks for personal data or passwords, be cautious.
Generic salutations: Phishing emails often use impersonal terms like “Dear user”.
Spelling and grammar mistakes: Many fake emails contain language errors that indicate fraud.
Suspicious links: The link may lead to a seemingly familiar site, but the address is subtly changed.
Attached files: Phishing emails often contain files with malicious code that can access wallets.
Urgency and threats: Users are pressured through time limits or warnings to react quickly
To protect yourself, always check that you are on the official website of a crypto exchange and never enter personal data or wallet information on insecure sites.
Malware
Hackers use malicious software to steal crypto assets without being noticed. Some malware targets clipboard addresses to reroute transactions to another address without the user's knowledge. Systems with insecure software or unverified wallet apps are particularly at risk. Even Android and iOS devices are not immune to such attacks.
Regular security updates, strong passwords and antivirus software help reduce the risk. Those holding large amounts of Bitcoin or Ether should conduct transactions via a secure device or hardware wallet.
Malware can appear in many forms, with different aims:
Trojan horses: These programs disguise themselves as harmless apps but contain malicious code that reads wallet data and steals cryptocurrencies like Bitcoin.
Viruses and worms: These spread autonomously across a system and can bypass security functions to access crypto wallets.
Ransomware: This malware locks access to devices or data and often demands Bitcoin as ransom for decryption.
Spyware: This covertly collects user behaviour data, including passwords and keys, to later access wallets.
Backdoors: These hidden access points are often installed without detection and allow hackers long-term access to devices to steal crypto assets.
Stolen keys
Private keys are the gateway to cryptocurrencies – whoever holds them controls the coins or tokens. If they are stolen, there is no way to recover the assets. Hackers obtain private keys through phishing, malware or insecure storage.In the past, millions of dollars in Bitcoin, Ethereum and other cryptocurrencies have been lost due to stolen keys. A common issue is insecure key storage in cloud services or note-taking apps, which can easily be compromised.
Private keys should therefore never be stored online, but secured on paper or in a hardware wallet.
Quantum computers: a future risk?
At present, the Bitcoin blockchain is considered secure, but quantum computers could change that in the long term. Researchers warn that powerful quantum computers could eventually crack encryption methods such as ECDSA (a digital signature system used to create and verify Bitcoin transactions), making wallets or transactions vulnerable to attack. This remains theoretical for now, but it is by no means impossible.
What is a 51% attack?
A 51% attack is arguably the most serious potential threat that could allow a blockchain to be hacked. If such an attack were successfully carried out by an individual or organisation, taking control of the majority of the network’s mining power (hash rate), it would be possible to alter and overwrite the Bitcoin network’s transaction history.
The decision on which transactions are accepted and which are rejected always requires a majority (i.e. 51%). This means that a majority of 51% could alter the distributed database of the blockchain, making double spending – spending the same transaction more than once – possible. However, such a scenario is highly unlikely to occur.
How to protect your cryptocurrencies from hacker attacks
To store Bitcoin, Ethereum and other cryptocurrencies securely, you should follow some basic security measures:
Use a hardware wallet: cold wallet or storage protects against online attacks
Enable two-factor authentication (2FA): makes unauthorised access to exchanges and wallets more difficult
Be alert to phishing attacks: never click on suspicious links and always verify website URLs
Store private keys securely: never keep them in cloud services or unencrypted files
Avoid long-term storage on crypto exchanges: exchanges can be hacked or become insolvent
Keep your operating system and software up to date: security updates close vulnerabilities
Use strong passwords and a password manager: makes it harder to hack accounts
Be cautious with smart contracts and DeFi protocols: not every platform is secure
To ensure cryptocurrencies like Bitcoin cannot easily be hacked, we recommend that all users thoroughly inform themselves about protective measures and read our article on the safe storage of cryptocurrencies.
Although certain security precautions should be taken, blockchain technology with its distributed databases remains one of the most innovative and groundbreaking developments to date. It opens the door to many applications just waiting to gain global acceptance.
