A Bitcoin vulnerability is a system flaw that allows a hacker to abuse it for their own benefit. The term was coined by Robert G. Gray, a renowned security researcher, who states in his book, “The Hacker Crackdown”, that any flaw in a system’s design that makes it susceptible to abuse is called a Bitcoin vulnerability. This includes misuse of the Bitcoin protocol to send funds without authorisation, or misuse of the public ledger to hide the transfer of funds.
This is very similar to weaknesses in systems like banking or credit card transactions, and unlike them, these flaws cannot be fixed or removed. What is the solution? Well, it’s the same as with most vulnerabilities: fix the problem, prevent the abuse. The latter is somewhat easier to do, since there are software tools available to help with preventing the problem, and many businesses can be run with a software such as TorChat that would prevent the use of the blockchain.
Unfortunately, even if this software were developed and put into practice, the general public’s knowledge of the Bitcoin protocol is limited. The public blockchain is available to the public, but anyone who wishes to download this information must follow certain steps, and it takes time before they can actually see all the transactions on the blockchain.
Another option is to use an open source software such as Tails, which is designed to protect user privacy by using an operating system based on Linux. It is strongly recommended to use these tools, which will protect the individual’s computer from malicious code while accessing the blockchain.
Any software developer should be able to write the software, but it can only be released when it has been reviewed by experts. Furthermore, it should be built with security features and tested by a group of people. Of course, the open source method does not completely safeguard your computer from malicious code, but it is a major improvement over using the traditional methods of running a system.
With all this in mind, the next question is how to backup your wallet. There are a number of ways to achieve this, but some prefer to create a backup from each transaction individually, although this is not recommended unless you have a lot of money. Such large transactions require high levels of computer performance and access to many computers, so most will have only a few transactions between them.
If you use multiple wallets, such as “Bitcoin to Wallet”Wallet to Bank Account Number”, then it is easier to keep backups of these as well. For example, with “Bitcoin to Wallet”, the software automatically transfers the Bitcoins between a hot wallet and a cold wallet. However, this still requires a steady internet connection and would require a lot of storage space if the wallet was large.
The other option is to copy the wallet file from the computer that it was created on to a USB drive. This will allow the wallet to be copied to any computer and used, although it requires a decent speed of internet connection and the ability to know where the drive is located.