Devices used to manage popular digital cryptocurrencies like Bitcoin have security weak spots, say scientists who have found a way to provide better protection against hackers.
Bitcoin is a form of digital currency that is supposed to provide a secure and private alternative to conventional money.
Researchers
at the University of Edinburgh in the UK carried out an in-depth
security analysis of the communications system used in popular models of
Bitcoin wallet.
They created a simple harmful software, or
malware, which was able to intercept messages sent between hardware
wallets and computers - where users manage their Bitcoin accounts.
The tests revealed that users' privacy is not protected.
They also showed how easy it is to access Bitcoin funds managed by such devices and divert them into a different account.
Based
on the findings published in the journal Information Security,
researchers proposed a fix for improving the security of such systems.
This would encrypt particular messages sent between Bitcoin wallets and
computers, making them much more secure.
Their fix could be
incorporated into all models of Bitcoin hardware wallet to offer better
protection against hacks, researchers said.
"A wallet should
protect not only our money, but also our privacy. It was surprising to
discover how easy it is to access a user's funds, even when
sophisticated hardware is incorporated," said Andriana Gkaniatsou from
the University of Edinburgh in the UK.
"Unfortunately, there is no
silver bullet when it comes to protecting financial digital assets - we
need to ensure that all components of the system are equally protected
and interact in a secure way," said Gkaniatsou, who led the study.
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