12/06/2017 | Bochum, Author: Tim Berghoff

G DATA now protects your Bitcoin wallet, too

Cryptocurrencies such as Bitcoin or Ethereum enjoy an increasing amount of popularity. More online shops make decide to accept Bitcoin (subsuming other crypto currencies as well) as a method of payment. Wherever there is a large demand and potential profit, criminals are usually not far away. They attempt to “steal” users’ accounts (also referred to as “wallets”).

G DATA researchers have come across malware, which targets browser-based online banking as well as cryptocurrency theft. Proactive components such as G DATA's BankGuard already protect your browser from attacks by those banking trojans. Criminals attempt to obtain password or private keys for a user's wallet. G DATA has now enabled its Keylogger protection for the most frequently used PC-based wallets, so that malware has no way of obtaining your password or the target address for a transaction. In effect, this protects your Bitcoin wallet from unauthorized access as well as unwanted transactions. 

 

What is Bitcoin?

Just as Ethereum or other crypto currencies, Bitcoin is a virtual type of money, which does not use the traditional banking system. Every user has an account – also referred to as a “wallet”, where his or her “balance” is stored. Transactions are processed in a decentralized network. This has a number of advantages, but also some drawbacks. The greatest advantage is that the entire system is secured using a so-called block chain. This block chain has all transactions stored. Every transaction is verified by the entire network, which makes manipulating or redirecting them almost impossible in practice.

Bitcoin is not (really) anonymous

Contrary to popular belief, Bitcoin is not a truly anonymous method of payment. To a degree, transactions can be traced back through the block chain. For this reason, underground trading forums, which trade in illegal goods, use so-called „Bitcoin Tumblers“, which makes tracing Bitcoins quite a bit more difficult. 

On the other hand, this method can lead to delays in verifying a payment transactions of up to several hours. By verifying transactions as well as adding them to the block chain, Bitcoins can also be generated or “mined”. Every node that processes a number of transactions is paid in Bitcoin. The beneficiary is usually the operator of a node. The current boom in the crypto currency market has made an impact on other areas as well: at times, certain graphics cards were sold out globally, and prices for the most sought-after models skyrocketed. Graphics cards are a preferred tool for mining Bitcoins as their computing power surpasses that of modern processors.

This high demand for computing power has another side effect, which can be interpreted as a downside: it requires vast amounts of electrical power. The Bitcoin network, for instance, requires several Terawatt hours of electricity per year. To put this in perspective: the average single-person household consumes about 2.600 Kilowatt hours annually.


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