According to Lozhkin, the main threat surrounding Bitcoins is theft. Cyber criminals can steal Bitcoins by using malware to target Bitcoin wallets stored on a machine that's connected to the Internet. They can also hack into Bitcoin exchanges and other third-party platforms, which are lucrative, high-value targets with mostly unproven security track records.
The biggest concerns have appeared in the operation of various Bitcoin exchanges and/or storage facilities. Brandt added:
All the largest thefts of coins have taken place in these "banks" of sorts, where people keep their bitcoins until they're ready to spend them. Unfortunately, in this unregulated, kind of Wild West marketplace, there's nobody to certify that security procedures are sound for the storage and management of coins and accounts.
In a Business Insider article, Jim Edwards pointed out what makes a Bitcoin theft different from theft of traditional currency and how the security of Bitcoin also adds to the risk. It is the permanence of the transaction. Edwards wrote:
Once a Bitcoin transaction has been approved by both sides, it cannot be reversed without the permission of the recipient. So when hackers engineer the transaction, the cash is gone forever.