As Bitcoin Value Skyrockets, Exchange NiceHash Gets Hijacked

As Bitcoin Value Skyrockets, Exchange NiceHash Gets Hijacked

posted Saturday Dec 9, 2017 by Scott Ertz

As Bitcoin Value Skyrockets, Exchange NiceHash Gets Hijacked

There is no doubt that 2017 will be remembered as the year cryptocurrency went mainstream. Bitcoin, and its siblings like Ethereum, have been around for a number of years, but this year made their names household names, especially in the last 60 days. The value of Bitcoin has skyrocketed over the past 60 days, starting at just under $5,000 per coin on October 11, and having a peak price of just short of $20,000 on exchange GDAX just this week.

With the growing popularity of Bitcoin, as well as the surging price, it was only a matter of time before a heist was run on one of the middle-tier exchanges. Going after a top-tier, like Coinbase, would be incredibly risky, as security is high, as is the chances of getting caught. A mid-tier, however, would have lesser security, and therefore a greater chance of success. That heist happened this week, as NiceHash lost an estimated 4,700 coin, valued at over $92 million at the peak price.

This is not the first heist of its kind, where a site has lost bitcoin thanks to the use of its own tools. It's important to note, however, that the timing is anything but coincidental. No data stored on the internet is ever truly secure, especially when the data involves money. As the value of that data increases, so does the chance of theft.

After the heist, the company shut down its service, leaving only a notice on its homepage. The notice apologizes for the service interruption, and that they "are stopping all operations for the next 24 hours." This message has been up, and therefore the service down, for several days, suggesting that whatever happened was large enough that they cannot get past it.

Following the hijack, other exchanges, including Coinbase, were unavailable, and the value of Bitcoin tumbled. For many who lost bitcoin as part of this heist, the loss could have been lessened if they had not maintained their inventory of Bitcoin on an exchange, but instead kept the coins in their offline wallet.

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