Top 5 Crypto Currency Hacks So Far
Cryptocurrencies have been witnessing phenomenal growth over the last few years. However, because of the rising value associated with cryptocurrencies, not only investors, but hackers have also managed to gain interest in different types of digital currency. This newly developed interest amongst criminals has led to some of the biggest heists the world has encountered. In this article, we will be discussing 5 of the top cryptocurrency hacks that have taken place so far.
1. The Mt. Gox Hack
Known to be one of the biggest losses for Bitcoin, Japan-based exchange called Mt. Gox started operating in 2010. It was known to be the biggest Bitcoin exchange at that time. Two hacks took place once in 2011 and then in 2014. In 2011, the hackers were able to make use of a security vulnerability and managed to bring the price of Bitcoin down to one cent. This was done by hacking into the computer of the auditor at Mt. Gox. However, even after this Mt. Gox was able to gain the trust of people again and recovered from this incident. In 2014, Mt. Gox found out about the transaction malleability attacked that they had been subjected to after which almost $473 million worth of bitcoins were stolen. In the same year, Mt. Gox had to declare bankruptcy.
2. The DAO Hack
The DAO hack resulted in exposing the shortcomings of the smart contract security. In 2016, somebody managed to exploit the obvious loophole that had existed regarding the splitting function that arises when someone wants to exit the DAO. As a result of this hack, $50 million worth of Ethereum was stolen, and the community was split up into two categories, the original Ethereum Classic (ETC) and Ethereum.
3. The Bitfinex Hack
Hong Kong-based exchange platform Bitfinex also fell victim to another major bitcoin attack in 2016. To manage risk, Bitfinex had come up with multi-signature wallets to manage risk better. But it was this security update that caused the hack. As a result, the price of Bitcoin fell to about 20%. However, Bitfinex took swift measures to handle the reaction by issuing tokens that were redeemable for USD. This has led Bitfinex to become a trustable name in the cryptocurrency platforms.
Poloneix is one of the popular names amongst the different cryptocurrency exchanges. However, the platform witnessed a hack in 2014 as a result of which 12% of the total Bitcoin held was stolen. This hack occurred due to a defective code that had existed within the withdrawal system. After this incident took place, Poloneix upgraded the security measures, and the users that had been affected due to the loss were able to get their money back.
5. Coincheck Hack (NEM)
Tokyo based exchange platform, Coincheck experienced a hack that resulted in a decrease of around 523 million coins of NEM, a cryptocurrency launched to address the resolve the accumulation of wealth issue associated with Bitcoin. All those that were stolen seemed to be stored in the hot wallet. Hot wallets have been considered to be vulnerable to hacking because of their connection to the internet. The results, however, are being constantly witnessed as the hack took place in January 2018.
Even though investing in cryptocurrencies has been a major topic for investors, it is important to be wary of the uncertainties associated with them. Cryptocurrencies are considered to be much more volatile than stocks, bonds, or any other financial instruments. Thus, one has to exercise careful consideration when investing in them.