Despite being launched in 2008, Bitcoin's core system has never been hacked or compromised, thanks to its robust SHA-256 encryption and Proof-of-Work (PoW) system.
However, cryptocurrency exchanges, wallets, and decentralized finance applications have been vulnerable to hacks and have been compromised numerous times, resulting in billions of dollars in losses.
In 2018, Italian exchange BitGrail was hacked, resulting in a loss of $146 million.
KuCoin, a cryptocurrency exchange, was hacked in 2020, resulting in a loss of $281 million.
According to reports, service providers, wallets, and applications remain vulnerable to hacking, with over 20 instances of digital robberies where at least $10 million in digital currencies were stolen from crypto exchanges or projects in the past year.
In 2021, Poly Network was hacked, resulting in a loss of $600 million, and Bitmart was hacked, resulting in a loss of $150 million.
The Ronin Network, a blockchain that supports the non-fungible token (NFT) game Axie Infinity, was hacked in 2022, resulting in a loss of $625 million.
It's estimated that 230,000 BitGrail users lost funds in the 2018 hack.
Quantum hackers, if they had the capabilities, could potentially break Bitcoin's encryption in minutes, but it would require an enormous amount of computational power, equivalent to 317 million qubits.
Due to the decentralized nature of Bitcoin, it's difficult for hackers to steal Bitcoins without being detected, as all transactions are recorded on the blockchain.
Despite the security of Bitcoin's core system, individuals have still lost Bitcoins due to phishing scams, malware, and other forms of fraud.
In 2022, it was reported that Bleeping Computer detected suspicious activity targeted at defrauding 23 million Bitcoin wallets.
The US recovered $4.5 billion in Bitcoin from the Bitfinex currency exchange hack, but it's unclear who will get the recovered funds.
There are recourse and recovery steps that fraud and hacking victims can take to address their losses, including working with law enforcement and cybersecurity experts.
Despite the security risks, the appeal of crypto remains, as it allows for fast, low-fee transactions with minimal intermediaries.