In a startling trend, cryptocurrency owners are suddenly discovering their “coins” have disappeared, stolen by hackers—something the blockchain technology was supposed to prevent.
The Slovenian cryptocurrency mining marketplace NiceHash—it matches “Bitcoin miners” with people willing to sell processing time on their home computers, paid in Bitcoin—said it was the victim of a “highly professional” hacking attack that targeted its payment system. A company official said about 4,700 Bitcoin were stolen in the heist.
Criminal organizations are increasingly targeting cryptocurrency markets, focusing on the exchanges. Based on reports in the cryptocurrency media, there have been at least three dozen similar attacks on digital currency exchanges since 2011, resulting in the theft of more than 980,000 Bitcoins—worth at least $15.2 billion at current pricing.
Blockchain encryption, the basis of Bitcoin, was supposed to prevent cyberattacks and limit the abilities of hackers. It uses Keyless Signature Infrastructure to “distribute” the financial information, meaning at least half of the “nodes” (transactions) in the system must be compromised before the data becomes insecure.
Investors who lose their Bitcoins have no recourse to recover. But, that’s preventing the price of the cryptocurrency from soaring to nearly $20,000 earlier this week. The volume was so strong that the world’s largest exchange, Coinbase, temporarily crashed, causing the price to fall back to about $18,000.
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