Cryptocurrency Hacks – Cryptocurrencies have had an astronomical growth in the past couple of years. In 2017, the growth reached record levels. The value of the cryptocurrencies in the market appreciated as a result and this has led experts to make comparisons with the stock markets. The comparisons have shown the stark differences between the two markets. For 2017, the cryptocurrencies market experienced over 3000% growth while the stock market had a mere 7%. While these numbers are astounding, they do not necessarily cast a bad light on either of the markets. Cryptocurrencies have also had challenges in the past. There have been a number of hacks that threatened the market. Let us look at some of the biggest of such hacks.
The NicheHash hack of December 2017 resulted in the loss of $63 million. The mining service that has been working with miners for several years publicly admitted to being targeted by a hack. The successful hack was able to result in the loss of over 4000 bitcoin tokens. The trail of the assets was not able to result in any meaningful positive results. The hack caused great damages to the company and the CEO, Marko Kabal was forced to resign. Even though the company tried to repair the damage caused by the hack, it has not been possible to completely gain back its credibility.
The Bitfinex hack is one of the most well-known cyber exploits. The hack resulted in a loss of almost 120,000 bitcoins. According to the estimates of 2016, that loss was equal to $72 million. Current estimates and values, however, make that loss come close to $1.2 billion. The loss in cash was not the most significant aspect of that hack, however. The multisignature accounts, which were considered to be safer, were proven to be fragile in the face of threats. Bitfinex and BitGo were the two companies which were responsible for the multisignature system. They both took the responsibility after the hack but the company was never really able to give any resolutions after the hack. The Bitfinex Hack is considered to be the second-largest hack in the crypto world.
The Mt. Gox. Hack
This hack is the highest-profile hack in the cryptocurrency world. This hack was not only carried out over a period of time but it was also carried out in a systematic manner. Over the course of years, hackers were able to get away with over 850,000 bitcoins. That loot was quite big for the time and it is estimated that the value of the hack could be well over $8.3 billion by current estimates. The hack was able to not only rival some of the biggest forex scam attempts, but it resulted in the complete bankruptcy of the firm. The vulnerabilities of the system were revealed to have been as a result of a poor coding security. The software that was used to control the platform had an undetected vulnerability where a code could overwrite a file that was being worked on by another party.
The Coincheck Hack
When it comes to the largest hack recorded, the Coincheck hack takes the crown. The Japanese cryptocurrency exchange was hacked and the details emerged earlier on in 2018. According to reports, hackers were able to steal coins worth $534 million. The coins were stolen from a hot wallet and this sparked criticism for the firm. The multisig wallets used at the time of the hack were already known to have vulnerabilities. Coincheck apparently admitted that it did not expect the coins to be stolen even though they were accessible via the internet. Even though the value of the coins was huge at the time of the hack was high, the value of XEM has gone down. The current value of the stolen coins would thus account to only half of the original worth.
The blockchain technology has been hailed as one of the most secure. This is why when high-profile hacks happen, most stakeholders in the market are caught off-guard. As the successful hacks have shown, vulnerabilities in the digital world are not just limited to the older systems. There are still many exploits that hackers can use when there is no proper oversight by companies and crypto platforms.