Hacker attacks on Bitcoin exchanges and a Trojan that sent Bitcoins from infected computers to the attacker’s account provoke questions about the general security of Bitcoin and thus also about its security against counterfeiting.
Bitcoin is not real – and above all not a consistent – “coin”, but consists of a digital character string that is exchanged in the form of cryptic keys during transactions. These keys are regenerated for each transaction. Encryption, the digital signatures of the transaction partners and the verification of the transaction codes by the Bitcoin algorithm make Bitcoin practically forgery-proof.
As the basis of the security function, Bitcoin uses asymmetrical encryption. For this purpose, the recipient of a message / transaction generates two related keys (codes) – one of which is public, the second private and only known to the code’s creator. The sender / initiator of a transaction encodes his message with the public code. The transaction can then only be decoded with the recipient’s private key, i.e. by a single person. You can check it out here https://bitcoindata.org/defi/ to use different Bitcoin platforms.
Based on this, every Bitcoin transaction receives a digital signature. The sender provides the message with his private key – the recipient decrypts with the public code of the combination.In practice, the Bitcoin algorithm generates the so-called hash value for every transaction – a number that is calculated from the transaction’s character string but does not say anything about its content – which is then encrypted and sent as a digital signature of the respective transaction. The recipient decrypts the hash value of the signature and also calculates the hash of the transaction itself – the matching of the hashes confirms the sender’s identity and the originality of the transaction. The SHA-256 hashing method used by Bitcoin generates data series as hashes that can identify even the smallest changes to the transaction. Counterfeiting a Bitcoin is therefore almost impossible.
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