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The rise of bitcoin is grabbing the attention of hackers who could get rich with a single successful raid. If exchanges are not employing a DDoS solution from companies like Incapsula, they are sitting ducks for highly skilled and highly motivated hackers.
Where the Money Is
Willie Sutton, the notorious bank robber was asked by a reported why he robbed banks and Sutton replied simply, “Because that’s where the money is.” Sutton died in 1976 and if he were robbing today, it wouldn’t be banks because that’s where the money isn’t. Today banks (the physical ones) really only have a few thousand dollars on hand for small transactions. Banks keep their customers’ money centralized in digital form surrounded by layers of security, which is governed by state and federal regulations and compliance laws.
Today bank branches really only have a few thousand dollars on hand for small transactions. Banks keep their customers’ money centralized in digital form surrounded by layers of security, which is governed by state and federal regulations and compliance laws.
And even with all this protection, banks are still successfully robbed online. It’s not easy. Hacking a bank typically requires a large syndicate with deep pockets such as nation state. Banks don’t publicize successful attacks because it’s bad for business. One well-documented attack which occurred in 2015 was a slow bleed by many institutions in over 30 nations.
Because banks are so well protected, the next logical frontier for hackers going ‘where the money is’ are coin exchanges, which manage digital currencies and business with initial coin offerings (ICOs). It doesn’t matter that financial experts like Warren Buffet label cryptocurrencies as ponzi schemes that will end badly, they are minting millionaires and billionaires. Bitcoin, litecoin, ethereum and dozens of ICOs have exploded with real value which can be exchanged for real goods and services. When bitcoin shot through the roof in 2018, the Winklevosses became billionaires and 50 CENT went from rags to riches.
Early adopters were drawn to bitcoin not to get rich as much as to use it as an online monetary exchange absent a central authority governing online transactions. A secure transaction without a governing authority afforded the buyers and sellers the same anonymity that paying with cash has in the real world. In the real world, a cash transaction can occur without a government, bank or anyone’s knowledge. Cryptocurrency is essentially internet cash.
The late adopters to bitcoin are drawn to bitcoin to get rich in the same way people try to get rich on pork bellies. Bitcoin futures began trading in late February 2018. This speculation is causing the cryptocurrency to inflate the price never before imagined, gaining the attention of hackers.
It was even happening before February. Late last year, mining marketplace NiceHash suspended operations while it co-operates with authorities over ‘professional attack.’ The hack was “a highly professional attack with sophisticated social engineering” that resulted in the theft of approximately 4,700 bitcoin. Mt. Gox was hit in 2014.
Cash is King
Robbing coin exchanges is much easier than robbing online banks because the hackers don’t need to constantly obfuscating their actions to withdraw the cash. A Cryptocurrency has the anonymity built in Hackers only need to break into the online wallets and pilfer strings of numbers.
Continue reading %Protecting the Web Assets of Cryptocurrency Exchanges%
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