Bitcoin remains the most popular cryptocurrency, as its price continues to surge past the $20k mark in recent weeks and showing no signs of losing its momentum. Although cryptocurrencies are often touted to be secure, and they are, in the sense that they are decentralized and open source, what they’re clearly not clearly not secure from are cyber attacks and theft.
Hackers are targeting Bitcoin users and exchanges worldwide. The latest casualty being NiceHash, a Slovenian-based crypto-mining marketplace, who made a public announcement yesterday about the details of the security breach. NiceHash has ceased operations while investigations are underway, and they work on remediating the situation (and their reputation). As a result of what they called “a highly professional attack with sophisticated social engineering”, NiceHash stated that their “payment system was compromised and the contents of the NiceHash Bitcoin wallet have been stolen.” Whilst they have not revealed the exact amount that was stolen, Reuters reported that the number amounted to approximately 4,700 Bitcoins (between $70.5 million to $94 million based on current valuations).
NiceHash offers a cryptocurrency mining service, where customers can give out their extra computing power for the complex calculations typically required to mine new Bitcoins or other cryptocurrencies. Users can also purchase computer processing power from other NiceHash users. Whilst users typically move cryptocurrencies they earn into their own digital wallets or a Bitcoin exchange, some opted to leave their earnings on NiceHash’s digital wallet, which has been digitally ransacked and emptied by the hackers.
Unfortunately, similar cases of Bitcoin robberies are becoming increasingly common, with almost no consequences and zero arrests made. One of the world’s largest Bitcoin exchanges, Bithumb, for example, was also hacked last June, resulting in the loss of billions of won and over 30,000 customer data compromised. What this points to is the fact that Bitcoin is just as vulnerable as any other online asset despite the widespread notion that the underlying blockchain technology is safer and more trustworthy than other kinds of digital financial transactions.
As the value of Bitcoin and other cryptocurrencies keep increasing, sophisticated criminal groups will continue to look for security weak spots and we can expect more of such cyber heist cases in the coming years. The surge in Bitcoin prices is great, but the usual buyer beware adage still applies, especially for a digital currency that is yet to mature, still trying to find its footing in terms of security and regulations.