If the blockchain cannot be hacked, how can you lose anything?

[StaffsLebowski]

Hi,

If the blockchain always tells the 'truth' and it's 'impossible' to be hacked because it's a distributed ledger, how is it possible to get hacked? (not counting letting someone have access to your private key).

If my bitcoin is encrypted on the blockchain, and, I'm the only person to have the private key, how is it possible someone else can hack it? My bitcoin is still on the blockchain, right? And I'm the only one with the key!

I've read horror stories on the net about companies going bust (people shitting themsleves when kraken went dark), and reports saying that people could lose bitcoins. How is this possible? The coins are on the blockchain so you can just collect the coins later, with the next, latest and greatest crypto exchange, right? Even if Kraken went bust, pffft.. who cares? Your coins are safe on the blockchain right?

Be interested to hear from the experts..

[BeEvil]

I'm not an expert, but in the blockchain, not coins are stored, but the results of transactions. That is, the bitcoins exist as records in the database. Blockchain can not be hacked or faked, but you can enter a private key on a phishing site, or sign a forged transaction.

[hatshepsut93]

I've read horror stories on the net about companies going bust (people shitting themsleves when kraken went dark), and reports saying that people could lose bitcoins. How is this possible? The coins are on the blockchain so you can just collect the coins later, with the next, latest and greatest crypto exchange, right? Even if Kraken went bust, pffft.. who cares? Your coins are safe on the blockchain right?

Be interested to hear from the experts..

When people keep their coins on exchange or some other online wallets, they don't control their private keys, they all trust that the owner will send them coins when they request withdrawals. It's just like banks, so sometimes those exchanges get hacked, and sometimes they turn into scams and disapper with all the coins of their customers. There's a good saying in Bitcoin community - if you don't control private keys, then it's not your coins.

[RodeoX]

...

If my bitcoin is encrypted on the blockchain, and, I'm the only person to have the private key, how is it possible someone else can hack it? My bitcoin is still on the blockchain, right? And I'm the only one with the key!
...

As long as you are the sole owner of a private key then only you can spend/move the associated balance. The blockchain itself is the truth as mathematically verified by computers around the world so attacking it is not really feasible. A thief is more likely to try getting your private key by tricking you and/or installing software on your computer. In the cases of exchanges disappearing with funds, they are able to do so if the exchange controls the private key. They often do. For this reason it is advisable to use only licensed businesses and withdraw your funds after transactions.   

[rumexx]

Nobody can hack blockchain but you can lose your money if through a mistake on your part you expose your private key. Although hackers normally try by phishing of which if you fall victim your account will be compromised.

[jamirrah]

You lose when someone get access with your private key like sometimes happen here participants in bounty and airdrops accidentally paste their keys instead of their public addy. There are also lots of site made to fool people and log in with their wallet credentials and get them. We should be careful everytime.

[olubams]

Hi,

If the blockchain always tells the 'truth' and it's 'impossible' to be hacked because it's a distributed ledger, how is it possible to get hacked? (not counting letting someone have access to your private key).

If my bitcoin is encrypted on the blockchain, and, I'm the only person to have the private key, how is it possible someone else can hack it? My bitcoin is still on the blockchain, right? And I'm the only one with the key!

I've read horror stories on the net about companies going bust (people shitting themsleves when kraken went dark), and reports saying that people could lose bitcoins. How is this possible? The coins are on the blockchain so you can just collect the coins later, with the next, latest and greatest crypto exchange, right? Even if Kraken went bust, pffft.. who cares? Your coins are safe on the blockchain right?

Be interested to hear from the experts..

Your earlier part is very correct but targeting your coins knows they can't hack the blockchain so they come after you by every means necessary and even if you have your private keys they don't come and ask for it. Its either they trick you in giving them, or the more advanced ones go after the wallet providers you are using just the the vulnerability of the Electrum that was discovered some days back but was patched.

[Rath_]

I'm not an expert, but in the blockchain, not coins are stored, but the results of transactions. That is, the bitcoins exist as records in the database. Blockchain can not be hacked or faked, but you can enter a private key on a phishing site, or sign a forged transaction.

As far as I know, this data could be somehow manipulated if someone had more than 50% of the hashrate. However, it is very unlike to happen. If you are worried about your huge investment then hardware wallet is the best choice right now. As other people said, human error is the most common here. Hardware wallets help you not to expose your private key.

[aardvark15]

Hi,

If the blockchain always tells the 'truth' and it's 'impossible' to be hacked because it's a distributed ledger, how is it possible to get hacked? (not counting letting someone have access to your private key).

If my bitcoin is encrypted on the blockchain, and, I'm the only person to have the private key, how is it possible someone else can hack it? My bitcoin is still on the blockchain, right? And I'm the only one with the key!

I've read horror stories on the net about companies going bust (people shitting themsleves when kraken went dark), and reports saying that people could lose bitcoins. How is this possible? The coins are on the blockchain so you can just collect the coins later, with the next, latest and greatest crypto exchange, right? Even if Kraken went bust, pffft.. who cares? Your coins are safe on the blockchain right?

Be interested to hear from the experts..

I think there are basically 2 ways you can lose your Bitcoins:

1) You don’t protect your private keys so someone can hack your computer and find the private keys.

2) You keep your Bitcoins on an exchange where someone else controls the private keys. In this situation, the exchange could get hacked, could go out of business, or could just steal your Bitcoins like was done with MtGox and Cryptsy.

[fmasta]

Hi,

If the blockchain always tells the 'truth' and it's 'impossible' to be hacked because it's a distributed ledger, how is it possible to get hacked? (not counting letting someone have access to your private key).

If my bitcoin is encrypted on the blockchain, and, I'm the only person to have the private key, how is it possible someone else can hack it? My bitcoin is still on the blockchain, right? And I'm the only one with the key!

I've read horror stories on the net about companies going bust (people shitting themsleves when kraken went dark), and reports saying that people could lose bitcoins. How is this possible? The coins are on the blockchain so you can just collect the coins later, with the next, latest and greatest crypto exchange, right? Even if Kraken went bust, pffft.. who cares? Your coins are safe on the blockchain right?

Be interested to hear from the experts..

There are hackers and this is their job. They continue to surprise us every week. There are phishing sites, you can also get by accident, enter your code key and say goodbye to the money.

[StaffsLebowski]

<<When people keep their coins on exchange or some other online wallets, they don't control their private keys>>

Exactly - great answer. This is crazy - you create a private key then give it an 'exchange', who is not regulated, whom you have no idea of their security, policies, structure - probably set up in the 'goldrush' as few years ago and people wonder why?

Your private key is private - it is not meant to be shared with anyone, not even an exchange. An exchange should be able to facilitate a request but not have access to you private key. If an exchange knows your private key then why bother with keys? Why not let the exchange just provide you with an ID that they have created?

If you have to give your private key away in order to get your money then there is something very wrong with the process...

[sopromat]

Most times when you have all your bitcoins on an exchange, you do not own your private key, the one who has it, is the exchange, so you do not own those bitcoins, it is only reflected on your balance.

And what do you mean with how can you lose anything?

I got hacked a few years ago, and it was only because i was using an online wallet, blockchain.info.

[StaffsLebowski]

<<I got hacked a few years ago, and it was only because i was using an online wallet, blockchain.info.>>

I am sorry to hear that, truly..

I studied public key encryption 20 years ago after reading about PGP by Phil Zimmerman. If you are serious about crypto currency, I strongly suggest you take 60 minutes of your time to read his website. Here's a good start: https://philzimmermann.com/EN/essays/index.html that will only take you 5 minutes of your time and it will probably the best 5 minute read you've done in a long time.

It is painfully obvious from reading messages on this site, that the majority of people understand crypto, currencies and the blockchain and are up to date with the latest twitter ramblings and self-proclaimed YouTube prophets, but have no clue about the most important part that keeps your money safe. If you give your private key to anyone then you do not understand how the system should work.

Please accept my sincere apologies to all if I am mistaken and that you do not have to reveal your private keys to an exchange or anyone else. My above paragraph is based on what I have read so far on these forums. If you have to reveal your private key to anyone else then there is something wrong with the process. The blockchain may have been proven to be secure, but all that security is undone when you give your private key away. This is analogous to having the most secure vault in the world, and then leaving the door open..

[khaled0111]

If you and only you know the private key then no one can steal your money.
But when your Bitcoins are being held by exchange platforms or online wallets which most of them don't give you access to your wallet's private key,
you are not 100%safe since all users private keys are stored on a database. Theoretiacally, a good hacker can get access to that database.

[Hubbanedy87]

I think wallets have already been hacked which still makes it risky to hold crypto regardless of how secure the blockchain is. I think spreading out your coins is a good idea.

[StaffsLebowski]

Correct - If you give the details of your private key to the exchange platform then your're at their mercy and hoped they're systems do not get compromised.

I've been told that https://www.bitcoin.de/en has a different approach to how it handles keys. I'm going to drop them an email and see what they say. The problem is, like all other crypto sites, they say they're experiencing high volumes blah, blah, blah..

One thing is for certain. I'll not part with any money until I can be 100% sure that I'm the only one who can access it. I prefer to pack my own parachute..!

[DARKANGEL6415]

The blockchain itself does not store your bitcoins in any way shape or form. Now i am no computer expert but i see plenty of people with massive computer knowledge asking out of desperation to try to get bitcoins out of locked out wallets. I have always seen the same answer so far saying they cant break the encryption itself.

[codewench]

Your private key is private - it is not meant to be shared with anyone, not even an exchange. An exchange should be able to facilitate a request but not have access to you private key. If an exchange knows your private key then why bother with keys? Why not let the exchange just provide you with an ID that they have created?

When you "move" your coins to an exchange, you aren't giving them your private key. Instead, you are paying them. At that point, the coins will be in the exchange's own private account. They will have their own internal ledger saying how many of those coins belong to you.

Why would you pay them? If you wish to day quickly trade cryptos, they need to be on the exchange for quick access. This is the same as if you were day trading stock - it needs to be held in "street name" with a brokerage. It is too slow to mail paper stock certificates back and forth. Similarly, it is too slow and expensive to move coins to and from an exchange.

[jseverson]

I've read horror stories on the net about companies going bust (people shitting themsleves when kraken went dark), and reports saying that people could lose bitcoins. How is this possible? The coins are on the blockchain so you can just collect the coins later, with the next, latest and greatest crypto exchange, right? Even if Kraken went bust, pffft.. who cares? Your coins are safe on the blockchain right?

As you have said, the blockchain has not been hacked yet, so these companies being hacked are likely due to inside jobs, whether sanctioned or not. I don't use Kraken, so I don't know how it works, but if Kraken has sole ownership of your private key, you will no longer be able to access it in case of a hack.

As far as I know, this data could be somehow manipulated if someone had more than 50% of the hashrate. However, it is very unlike to happen. If you are worried about your huge investment then hardware wallet is the best choice right now. As other people said, human error is the most common here. Hardware wallets help you not to expose your private key.

Actually, if someone had control of 51% or more of the hashrate, they'll be able to choose whether to accept or reject transactions, and they'll be able to double spend. They can't manipulate the blockchain as far as I'm aware.

[szpalata]

Nobody can hack blockchain but you can lose your money if through a mistake on your part you expose your private key. Although hackers normally try by phishing of which if you fall victim your account will be compromised.

Exactly, we may loose out if we get reckless and give off our private keys to the wrong people through social engineering and phishing and so it is best if we are careful enough to avoid third parties from stealing our funds and just leave hackers alone because they can't hack us unless we give them the chance.