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Crypto Guides

Some Of The High Profile Crypto Exchange Hacks You Must Know!

Introduction

Even though cryptocurrencies are secure, crypto exchanges are where hackers target to loot millions of dollars. No matter how big a cryptocurrency is with the hacks we have seen so far, the exchanges will inevitably be subject to hacks at some point in time. Even though it is 2020, almost ten years since the advent of bitcoin, the hacks have never been slowed down. This is why it is always advisable for the crypto investors to hold their assets in their personal wallets instead of storing them with the crypto exchange itself.

Let us look at some of the high-profile cryptocurrency hacks so far:

The Mt.Gox

Mt.Gox, a Japan-based cryptocurrency stock exchange, was the biggest and busiest of exchanges, with 70% of bitcoin transactions from all over the world was going in the platform back then in 2013-14. With cryptocurrency or cryptocurrency exchanges, there were no regulations. There were many loopholes in the company’s management, like there was no VCS, Version Control Software. The VCS mainly stores all the information of all the features, coding set up of a particular version of the software product.

Without proper VCS, we will not know what changes were made when and it would be practically impossible to go back to a particular version of the software if necessary. All the code changes were to be approved by the CEO himself, which is the biggest bottleneck. There was no testing policy; the developers develop code and deploy it without any particular testing, which is a disaster. All these underlying issues led to a massive hack amounting to $473 million worth of bitcoin in 2014, which eventually led to the closure of the exchange permanently.

The DAO Hack

Before the 2019 Hack of Ethereum classic, DAO hack was the major one in the Ethereum platform. DAO, Decentralized Autonomous Organization, is a smart contract that was supposed to revolutionize the platform. The DAO acts as a decentralized venture capital fund for all the future DAPPS getting developed in the platform. Anyone can buy DAO for some ether and gain voting rights for any proposed app developed in the platform.

If one doesn’t wish to vote any further or doesn’t want to contribute to an app they are not interested in, they can opt-out of DAO. The opting-out part is where the hackers aimed and hacked 50 million dollars in 2016. The opting-out function has been made recursive by hackers. Hence instead of returning the funds once, the system kept returning the funds until it was noticed and stopped. Due to this issue, Ethereum was hard forked into Ethereum and Ethereum Classic.

The Bitfinex Hack

The Bitfinex exchange for increasing the security and ease the transactions for the users came up with multi-sig wallets with the collaboration of Bitgo. Multi-signature wallets are such wallets that have multiple keys. One key is owned and stored by the company.  While the owner of the wallet has two keys, he may give one key to his trustworthy friend/relative, so that even he loses his key, he has a backup. Generally, the multi-signature wallets need two keys to operate.

These wallets are hot, and this additional security feature ironically led to the hack. However, there are many theories on how and why the hack happened. Bitfinex rose to limelight and gained the credibility back. $72 million worth of bitcoin was hacked due to which 20% of the value of each bitcoin was eroded.

Later we saw many hacks in different exchanges like Bithumb where $30 million worth of cryptocurrency was stolen. Coinrail was hacked for $37.2 million, BitGrail for $195 million, and Coincheck for $534 million.

Conclusion

While cryptocurrencies are no doubt safe, but one has to do their homework on the exchanges, they are transacting. Always store your cryptocurrency in your own hot/cold wallets. Crypto exchanges will always be targeted if they are doing business for very high value. They should voluntarily show the security measures they are taking to avoid any potential hack. No matter which cryptocurrencies one is trading with, due diligence on the exchange is first and foremost.

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Crypto Videos

Craig Wright Admitted to Hacking MT. GOX!

Craig Wright Admitted to Hacking Mt. Gox?

 

Craig Wright’s legal team seems to have alleged that Wright controls one of the BTC addresses that is affiliated with the Mt. Gox hack.
Riccardo Spagni, one of the faces of the anonymous Monero coin, which is also known as Fluffy Pony, posted a tweet indicating Craig Wright’s affiliation with the Mt. Gox-related Bitcoin wallet.

Spagni tweeted, “Just so we’re clear, Craig Wright has openly admitted (through his lawyers) to be the person that stole 80,000 BTC from Mt. Gox.” Spagni also included court documents in the post.
The documents he posted indicate that the ‘1Feex’ address is the address where the stolen Mt. Gox funds were sent.

Mt. Gox address included among the Tulip Trust addresses

 

As a part of an ongoing legal battle, Craig Wright claims to have at least partial ownership of the Tulip Trust, which is a list of numerous Bitcoin wallet addresses that hold roughly 1.1 million Bitcoin. The aforementioned Bitcoin was allegedly mined by Wright and his business associate, Dave Kleiman, in Bitcoin’s earliest days.

Dave Kleiman passed away in 2013, leaving Wright completely unable to move the funds on his own. Spagni’s claim alongside the court document screenshots presented indicate that one of the alleged Tulip Trust wallet addresses contain stolen funds from the 2014 Mt. Gox hack.

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Crypto Guides

Bitcoin – The First Scalable Cryptocurrency Ever!

In the previous article, we have discussed the evolution and properties of cryptocurrencies. Now, let’s understand Bitcoin, which is the first scalable cryptocurrency.

Introduction

It has been around 11 years since Bitcoin has come into our lives. I am saying that because everyone who knows about bitcoin, at some point, would have wondered should they invest in it or not. Some have invested and gained so much from it. I’m sure you would have heard of the term Bitcoin millionaires. Of course, some have seen losses as well. Ever since the inception of Bitcoin, there is so much talk and hype about cryptocurrencies. Some governments have even made some changes to the existing laws to support cryptocurrencies. While some governments made laws against this digital currency. It all began with one crypto, Bitcoin. Hence, it is important for us to know the evolution of Bitcoin, which is still considered as a synonym of cryptocurrency.

How it all began?

It all began when a pseudonymous person called Satoshi Nakamoto released a whitepaper on October 31, 2008. The white paper described the blockchain technology and the Bitcoin cryptocurrency. When the technologists read the document, many thought it is ground-breaking technology and wanted to see it working in rea, while some wanted to explore the properties of blockchain other than cryptocurrencies. Nakamoto not only released the white paper but also mined the first block of the Bitcoin network in Jan 2009. Thus, he began the journey of Bitcoin.

The first-ever recorded transaction

The first recorded purchase transaction using Bitcoin happened in May 2010. Laszlo Hanyecz, a computer programmer,  paid 10,000 BTC for 2 Pizzas, and it was merely $25 back then. At today’s price of the bitcoin, the pizzas cost around $80 million. Cryptonizers celebrate that day as Bitcoin Pizza day to date.

Price history

In July 2010, the price of one Bitcoin was at $0.08. In February of 2011, the price came up to $1. Then it gradually started increasing as more and more people came to know of it and started investing. By June 2011, the price surged to $11. By April 2013, the bitcoin achieved a three-digit rate of $266. By November, the same year, it reached a four-digit figure of $1242.

Picture Credits – bitcoinwiki.org

From there on, there have been fluctuations depending on the demand and various rumors about the coin. In 2017 December, the price rose to $19,783.06, the highest ever. As of October 2019, the price of one Bitcoin is $8,300.

Birth of new coins from Bitcoin

Bitcoin Cash and Bitcoin Gold are two coins forked from the Bitcoin blockchain. These are some of the major altcoins (alternate coins) in today’s cryptocurrency market. Bitcoin inspired the birth of many other cryptocurrencies. We can say that these altcoins emerged only after Bitcoin proved the market potential. Ethereum, Litecoin, XRP are some of the examples.

Emergence of the cryptocurrency market

Cryptocurrency exchanges started their operations after the rise of new cryptos in the market. Bitcoinmarket.com is the first exchange ever. However, the exchange is defunct now. In July of the same year, Mt.Gox was launched as well. Around 2013 and in early 2014, nearly 75% of the Bitcoins transaction across the world happened through Mt.Gox. In 2014, they had to liquidate the funds because nearly 850,000 bitcoins were stolen from the exchange. This is the biggest disaster in Bitcoin history ever.

Bottom line

At present, everything in our life is getting digitalized. So why not the currency we use? Bitcoin is that new-age digital currency which has a massive potential to transform the currency space. It is not too much to say that it has achieved the same already. Let’s see what more wonders this crypto can create in the near future. Stay tuned for more exciting and engaging content. Cheers!