Sunday, December 10, 2017 by Ethan Huff
Another major cryptocurrency heist is being reported in this news, this time at an online Bitcoin marketplace known as NiceHash. According to reports, hackers were somehow able to break into the NiceHash system and steal about 4,700 Bitcoins, which at the time (Bitcoin prices have since risen) were valued at nearly $64 million.
In a statement published on its website, NiceHash (which is no longer functional as of this writing) notified its users that a major “security breach” had taken place, and urged them to change their passwords immediately in order to ensure that their own Bitcoins remain safe. The company stated that an investigation is currently underway to see what happened, and that the site will hopefully soon resume operations.
“Importantly, our payment system was compromised and the contents of the NiceHash Bitcoin wallet have been stolen,” an official statement reads, as relayed by Breitbart News. “We are working to verify the precise number of BTC taken.”
Unlike the private wallets that many Bitcoin users maintain on their own computers or smartphones, NiceHash functioned as an online wallet where Bitcoin was stored somewhere in the “cloud.” This format opens up the risk that someone might break into the system and steal the encrypted data that identifies Bitcoins within the greater blockchain, creating a vulnerability that could allow for their theft.
“Clearly, this is a matter of deep concern and we are working hard to rectify the matter in the coming days,” the NiceHash statement goes on to say. “In addition to undertaking our own investigation, the incident has been reported to the relevant authorities and law enforcement and we are co-operating with them as a matter of urgency … We are fully committed to restoring the NiceHash service with the highest security measures at the earliest opportunity.”
How someone could have broken through NiceHash’s multiple layers of encryption has many in the cryptocurrency world scratching their heads. Was this a high-level attack brought about by very powerful people possessing the wherewithal to wreak a lot of havoc on Bitcoin as part of a concerted agenda? It’s definitely possible.
Andrej P. Škraba, NiceHash’s head of marketing, stated his opinion that the hack was “a highly professional” one that involved “sophisticated social engineering.” This suggests that it wasn’t necessarily just entry-level hackers looking to score a boatload of cash that executed this particular mission, but possibly highly advanced hacking entities trying to both make a quick buck and invoke fear throughout the Bitcoin community.
Commenting on how the NiceHash system works, The Guardian explains that:
“NiceHash is a digital currency marketplace that matches people looking to sell processing time on their computers for so-called miners to verify bitcoin users’ transactions in exchange for the bitcoin.”
Ideally, NiceHash would have stored its users’ Bitcoins on multiple distributed wallets in order to make them less of a target for hackers. But according to users of the service who have expressed criticism about the company’s storage of Bitcoins, there was a single wallet that NiceHash had been using that contained a very high quantity of its users’ Bitcoins, a large number of which we now know have completely vanished.
“In hindsight, NH shouldn’t have kept so much money in a single online wallet,” a poster on the online message board forum Reddit commented following the news. “They should have spread on multiple offline wallets in different physical locations to mitigate damage.”
Natural News readers will recall that this isn’t the first time that cryptocurrency has been stolen or “vanished.” Back in November, it was reported that more than $300 million worth of “Ether” currency was accidentally “deleted” after a programmer made a mistake in the system.
Sources for this article include: