Can a cryptocurrency like Bitcoin get hacked or shut down?

Bitcoin is considered hack-proof, as the Bitcoin blockchain is protected by a decentralised network and strong cryptographic methods. Nevertheless, hacking attacks on crypto platforms, wallets or exchanges keep occurring, with assets worth millions being stolen. But can Bitcoin itself be hacked? Or is the blockchain truly impenetrable? In this article, we’ll explain why Bitcoin is seen as especially secure, what attack methods exist against cryptocurrencies and how you can best protect your coins.

• Bitcoin has never been hacked, as the blockchain is protected by a decentralised network and strong cryptography.

• A 51% attack could pose a risk, but is extremely unlikely due to Bitcoin’s high computing power.

• Wallets and crypto exchanges are common targets for hackers, as they’re often less secure than the blockchain itself.

• Hackers use phishing, malware and stolen keys to gain access to digital assets

• Although blockchain technology is considered secure, users should take protective measures to secure their cryptocurrencies.

Why is Bitcoin considered "hack-proof"?

Bitcoin is considered hack-proof because the Bitcoin blockchain is constantly verified by the entire network. As a result, attacks on the blockchain itself are highly unlikely. To add a new block with bundled transactions, each participant (miner) updating the Bitcoin database continuously solves complex mathematical problems.

These complex mathematical problems arise from Bitcoin’s cryptographic hash function. When a specific block is added to the database, every node in the network must agree on the validity of that block. Only when all nodes agree is the Bitcoin database updated accordingly.

Manipulating the cryptocurrency network is nearly impossible. The decentralised, chronological, computing and high-performance Bitcoin blockchain not only prevents the deletion or overwriting of an already validated Bitcoin block but also double spending.

What happens during a hacking attack on the Bitcoin blockchain?

As you already know, there isn’t just one copy of the Bitcoin blockchain. Instead, every node in the Bitcoin network has a copy. The nodes are distributed globally and contain all Bitcoin transactions carried out to date.

A hacker wanting to alter the distributed database of Bitcoin or another network based on blockchain technology would have to hack not just one, but more than half of the computers involved in the network (a 51% attack).

Can a blockchain be hacked?

Yes, a blockchain can be hacked – but the difficulty varies depending on the network. The level of security depends on factors such as the consensus mechanism and computing power.

A known risk is the 51% attack, in which attackers take control of the majority of computing power and manipulate transactions. While smaller blockchains are vulnerable, Bitcoin is virtually immune due to its high hashrate.

Smart contract vulnerabilities also pose a risk. On platforms like Ethereum, millions of dollars have already been stolen through hacking attacks. Cross-chain bridges, which transfer cryptocurrencies between blockchains, are especially affected.

So, a blockchain isn’t invulnerable, but large networks like Bitcoin or Ethereum are regarded as extremely secure. Much more frequently, crypto exchanges, wallets or platforms are hacked – which is why secure handling of digital assets is crucial.

Can Bitcoin be hacked with the help of AI?

Artificial intelligence (AI) can optimise many areas, but it doesn’t make it more likely that Bitcoin will be hacked. The Bitcoin blockchain is extremely secure thanks to its decentralised structure and proof of work consensus mechanism. Even with powerful AI algorithms, it would be nearly impossible to surpass the network’s enormous computing power.

However, hackers do use AI to enhance phishing attacks or malware. This allows them to trick users into revealing wallet login details or installing malware without noticing. Crypto exchanges and platforms are therefore more at risk than the blockchain itself.

In short: AI can refine hackers’ attack strategies, but the Bitcoin blockchain remains protected by its security mechanisms. The far greater risk is for individual users and exchanges when security gaps aren’t addressed.

Methods of hacking cryptocurrencies

There are various methods to hack cryptocurrencies. 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, malicious code and stolen keys.

We've summarised the most important attack methods so you can understand where the greatest risks lie and how to protect yourself.

Wallet hacking

Wallets are a popular target for hackers because they provide direct control over cryptocurrencies. Hot wallets, which are constantly connected to the internet, are especially vulnerable. Hackers use malware, insecure apps or phishing attacks to steal private keys and thus gain access to assets. Once a key is compromised, it 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 the millions through such attacks. Secure wallet usage, two-factor authentication (2FA) and cold storage—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 often pose a significant security risk. Attackers exploit smart contract vulnerabilities, security gaps 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 unable to recover their stolen tokens in most cases. These hacks show that not only individual wallets or crypto exchanges are targets of attacks but also decentralised systems. To protect themselves, users should use bridges cautiously and inform themselves about their security measures before making transactions.

Hacking crypto exchanges

Crypto exchanges like Binance, Bybit or FTX manage large amounts of cryptocurrencies and are therefore particularly attractive targets for hackers. Attacks often occur through platform vulnerabilities, data leaks or stolen access data. In the past, billions of dollars have already been stolen through attacks on exchanges, as in the case of Mt. Gox or Coincheck. A successful hack can result in users losing their deposits if the exchange does not offer refunds. Therefore, it's advisable not to store large amounts permanently on an exchange and 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 have been hacked from users. Hackers pose as reputable platforms and lure users to fake websites to steal login credentials or private keys. Particularly dangerous are emails, fake apps and social media scams that appear deceptively real. Even well-known exchanges like Binance or Bybit have already been misused for such fraud attempts. A common scenario is receiving an email with a supposed security alert prompting you to log in as soon as possible—but the provided site actually belongs to the attackers. To protect yourself, always check that you're on the genuine website of a crypto exchange and never enter personal data or wallet information on insecure sites.

Malicious code

Hackers use malware to steal crypto assets unnoticed. Popular methods include keyloggers, trojans or crypto-mining malware that run in the background on infected devices. Some malicious programs aim to manipulate wallet addresses in the clipboard so that cryptocurrencies are sent to another address without the user noticing. Systems with insecure software or unverified wallet apps are particularly affected. Android and iOS devices are also not safe from such attacks. Regular security updates, strong passwords and antivirus software help minimise the risk. Anyone holding larger amounts of Bitcoin or Ether should use a secure device or a hardware wallet for transactions.

Stolen keys

Private keys are the access to cryptocurrencies—whoever possesses them controls the coins or tokens. If they are stolen, there's no way to recover the assets. Hackers obtain private keys through phishing, malware or insecure storage. In the past, there have been cases where millions of dollars in Bitcoin, Ethereum and other cryptocurrencies were lost due to stolen keys. A common problem is the insecure storage of keys in cloud services or note apps that can be easily compromised. Therefore, private keys should never be stored online but secured on paper or in a hardware wallet.

What is a 51% attack?

A 51% attack is arguably the most serious threat to blockchains. If such an attack were successfully carried out by a person or organisation, taking control of the majority of the network's mining power (hashrate), the transaction history of the Bitcoin network could theoretically be altered and overwritten. 

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. Thus, double spending—the multiple use of the same transaction—would be possible. However, it's very unlikely that such a scenario would actually occur.

Can Bitcoin be shut down or switched off?

A 51% attack on Bitcoin has never been successful, nor has the network ever been shut down, not even for a brief moment. Moreover, numerous authorities and banks have repeatedly called for the shutdown of the Bitcoin network. Each time unsuccessfully, as Bitcoin has been running uninterrupted for almost ten years.

For a total system failure of the Bitcoin network to occur, several things would have to go wrong. Here are some "doomsday scenarios":

If power were to fail worldwide, shutting down the internet and all communication channels, the nodes in the network could no longer communicate with each other, and the entire Bitcoin network would be shut down.

A Bitcoin update contains a harmful bug that, despite thorough testing and peer-to-peer network verification in the Bitcoin protocol, remained undetected. The network would likely crash for a short time. This could lead to a drastic drop in Bitcoin's price and a fork of the blockchain.

Bitcoin is decentralised and therefore theoretically cannot be banned by a single government. In the past, however, attempts have been made to ban cryptocurrencies or restrict their use. Since a single government alone can't do much, multiple governments could join forces to push through a ban on cryptocurrencies. However, it's much more likely that governments will enact laws to protect investors and tax regulations.

The 51% attack represents a, albeit unlikely, but still serious threat. However, for such an attack to be successful, not only would a majority of 51% of network participants be required, but also enormous investments in mining equipment. Aside from these factors, it's highly unlikely that such a majority would actually come about, as network participants would also be jeopardising their own profits. 

Furthermore, new and supposedly improved cryptocurrencies are introduced to the markets almost daily. Such developments carry the risk of market fatigue in investments. This means that if all investors have bought an asset, there are no more buyers to whom they can sell, even if they want to, leading to a price drop.

Bitcoin has been functioning smoothly for almost ten years and will continue to maintain both its reputation and value.

Why are Bitcoins stolen?

Most cryptocurrency thefts affect users and websites that don't take the proper precautions in storage. Usually, coins are stolen that were stored in places where they weren't secure.

The Mt. Gox hack is perhaps the prime example of inadequate security measures and the largest theft of cryptocurrencies. Mt. Gox was a cryptocurrency exchange founded in Japan and converted into a Bitcoin exchange in 2010. Due to a lack of security measures, over 850,000 BTC were stolen. The Mt. Gox hack is the largest hack since the inception of Bitcoin and led to the exchange's bankruptcy in 2014.

Fortunately, other exchanges around the world have learned from this incident and have since kept their security measures up to date.

Notable cryptocurrency hacks

In recent years, numerous crypto platforms, bridges and exchanges have been hacked, with billions of dollars in cryptocurrencies stolen. Here are some of the biggest hacks that have shaken the industry.

Poly Network

In 2021, Poly Network, a platform for cross-chain transfers, fell victim to one of the largest crypto hacks in history. An attacker exploited a security vulnerability and stole tokens worth over $600 million. Surprisingly, the hacker returned a large portion of the stolen assets.

Ronin Network

The Ronin Network, used for the blockchain game Axie Infinity, was hacked in 2022 through a vulnerability in the validator structure. The attackers, allegedly from North Korea, stole around $620 million in Ethereum and USDC—one of the largest hacks of all time.

Binance

In 2019, Binance, one of the largest crypto exchanges, was compromised through a coordinated attack. Hackers used phishing and malware to steal API keys and 2FA codes. Around $40 million in Bitcoin were lost, but Binance reimbursed affected users for the losses.

FTX

Following the collapse of the crypto exchange FTX in 2022, a mysterious hack occurred. Unknown individuals stole around $400 million from the insolvent platform's remaining wallets. To this day, it's unclear whether it was an external attack or insider fraud.

Mt. Gox

One of the most well-known hacks occurred in 2014 when Mt. Gox, then the largest Bitcoin exchange, was attacked. 850,000 Bitcoin (worth around $450 million at the time) disappeared. The incident led to the exchange's bankruptcy, and affected users are still fighting for compensation today.

Coincheck

In 2018, the Japanese exchange Coincheck fell victim to a hack in which around $530 million in NEM tokens were stolen. The attackers exploited a vulnerability in the platform's hot wallet. Coincheck partially compensated its users.

Nomad Bridge

In 2022, the Nomad Bridge, a protocol for cross-chain transfers, was attacked due to a faulty code implementation. Hackers stole almost $200 million—the unique aspect: many attackers simply copied the original exploit transaction to enrich themselves.

Bitmart

Bitmart was compromised in 2021 through an attack on hot wallets. Hackers stole around $200 million in various tokens by compromising private keys. The exchange compensated affected users to regain trust.

Bybit

Bybit itself hasn't been directly hacked so far, but phishing attacks and fake websites have repeatedly caused users to lose assets. Users should therefore always ensure they're logging in only through the official Bybit domain.

How to protect your cryptocurrencies from hacking 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 aware of phishing attacks: never click on suspicious links and check 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 go bankrupt

• Keep your operating system and software up to date: security updates close vulnerabilities

• Use strong passwords and password managers: makes account cracking more difficult

• Be cautious with smart contracts and DeFi protocols: not every platform is safe

To ensure that cryptocurrencies like Bitcoin can’t be easily hacked, we recommend all users practise careful security habits and read our article on the secure storage of cryptocurrencies.

Although certain security precautions must be taken, blockchain technology with its distributed databases is considered one of the most innovative and groundbreaking developments to date. Blockchain technology opens the door to many applications that are just waiting to conquer the world.

Further topics around cryptocurrency

Are you interested in how to store your cryptocurrencies securely and what mechanisms underlie Bitcoin, Ethereum and others? In the Bitpanda Academy, you’ll find a wealth of guides and tutorials offering deeper insights into topics like blockchain technology, crypto trading, trading platforms and the secure handling of digital assets.

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