It seems that the world of bitcoin is still not safe, with hacks still occurring on a regular basis.
NiceHash: the Latest Bitcoin Hack Victim
The victim of this latest hack was a platform called NiceHash who have dubbed themselves as being the biggest marketplace when it comes to the mining of digital currencies. They announced on December 6, 2017, that they would have to suspend their operations for at least one day as a result of a breach of their security.
According to NiceHash, there was approximately $64 million worth of bitcoin stolen from them, calculated at the market price on the day these funds were taken; this translates to more than 4,700 bitcoins that were stolen.
It later was revealed that their payment system had been compromised, with all of their bitcoin being stolen. The hack is said to have been highly professional, and it utilized advanced social engineering to pull it off.
The platform itself is where people go in order to mine cryptocurrencies and subsequently get paid through bitcoin. Due to their size and user base, they are making payments in the millions of dollars each and every week which gives an insight into what sort of liquidity they may have had at the time of the attack.
They are still trying to figure out the exact number of bitcoin that was stolen, at a point in time when the prices of the cryptocurrency continue to hit all-time highs. This came at a time when the world saw it bypass the $16,000 mark for the first time, not even a week after it had bypassed the $10,000 level.
There were no details as to whether user accounts were also affected, or if it was just the accounts of NiceHash itself. They have now warned their users to change their passwords just in case this data was compromised, and the hackers could access the funds in these wallets. They are of course conducting their own investigation into the matter, while the relevant authorities will also be getting involved to figure to why this happened and to learn the lessons to prevent something similar from occurring in the future.
The Importance of Taking Control of your Private Keys
This is not the first time a hack such as this has occurred. In 2014, Mt. Gox revealed that it believed hundreds of millions of dollars’ worth of bitcoin had been stolen from their exchange, which led to them filing for bankruptcy.
In autumn 2016, a bitcoin exchange based out of Hong Kong called Bitfinex were hacked and lost almost 120,000 bitcoin, which at the time had a value of approximately $65 million.
There were further attacks that happened in Europe during 2017, with Bitstamp being robbed of roughly 19,000 bitcoin.
This showcases the importance of having the right security protocols to protect against these attacks which can ultimately be the downfall of these exchanges and platforms. There is no doubt that other companies in the industry have sat up and taken note after this latest spate of attacks and are putting protective measures in place. Decentralized exchanges, such as Bisq, also stand to benefit from the increasing frequent of hacks in the bitcoin ecosystem, as centralized exchanges are usually the main targets.
We suggest our readers safeguard their bitcoin by storing them in cold storage (if you have a particularly large bitcoin wealth, this guide will be useful), be aware that all exchanges are prone to hacking. As the old saying goes “if you don’t own the keys, you don’t own the coins.”