Bitcoin is attracting the attention of criminals

Bitcoin

Bitcoin, which has seen a meteoric rise in value over the past year, is also fast attracting criminals and there have been a string of robberies lately involving the digital currency.

In the past two months alone there have been several robberies. BIPS, which is Bitcoin payment processor in Europe, has had around a million stolen after a DDoS attack. DDoS stands for distributed denial of service and it allowed hackers to gain control of user’s Bitcoins. Bidextreme.pl, which is a Bitcoin exchange in Poland was also attacked, though they have not reported what was lost. Roughly $100,000 was lost after Bitcash.cz, which is another exchange, this time a Czech one, was hacked into and TradeFortress, in Australia, was as well and lost $1 million.

One of the bigger digital heists so far occurred in China, when GBL, another Bitcoin exchange, had their site brought down and then after finally coming back on it was discovered that $4.1 million had been taken.

All that can definitely make someone feel very cautious and paranoid about using Bitcoin, and it will be interesting to see if it deters the rise of the digital currency. Right now one is worth $780 US but by the time this story comes up it could more, or maybe left if the thefts have any affect. Right now the safest way to go about having Bitcoin currency is to store them in “cold storage”, which is essentially something like a USB drive, which isn’t connected to anything, or even “deep cold storage” which means storing the USB drive in a safe or deposit box of some kind.

[via Quartz, Preev, image via antanacoins’ flickr]

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2 comments

  1. Coyote

    A little late on the headline there… pretty sure bitcoins have been used by criminals since they first started taking off. While I agree with the principal of bitcoins, it will never be accepted as a real currency unless it can be tied to a physical property. That could be as simple as a bank that backs them like the FDIC, or putting them in stock of something else. But stand alone bitcoins may as well be wooden nickels, and the theft of them through DDOS attacks seems a bit off to me…. how does one steal from a site while it’s under such an attack that blocks all communications?