Bitcoin Faces $72 Million Breach

Bitcoin Faces $72 Million Breach Bitcoin saw an over 23% plunge due to theft of 120,000 units this past Tuesday, from the exchange platform, Bitfinex, in Hong Kong. Bitfinex serves as the largest dollar-based exchange for bitcoin. The 120,000 units of digital currency equate to about $72 million, about 0.75% of all bitcoin in circulation.

Furthermore, the theft serves as the second-biggest security breach ever. In order to take a step toward resolving the issue, law enforcement has been contacted and the company is cooperating with leading blockchain analytic companies, working to track the stolen currency.

As of Wednesday, August 3rd, it has yet to be decided how to address customer losses. As a result of this week’s breach, Bitcoin has seen a decline in prices, similar to that of 2014’s collapse of Mt Gox exchange in Tokyo, when approximately $500 million in customers’ Bitcoins were lost in a previous hack. After initially declining 23% on Tuesday, the company has seen the slightest improvement, as of Wednesday, with a 1% rise.

According to a bitcoin expert, this hack exposes the risks facing companies which rely on cryptology for their accounts. Singapore-based, Anthony Lewis, commented, “The more you rely on its benefits, the greater the potential for damage when keys are stolen. We still have some way to go to create highly secure but convenient systems.”

There is no word yet as to whether or not the theft was committed from inside the company or through an outside hack. However, a representative of Bitfinex commented on an online forum that he was “nearly 100 percent certain” that the theft was not committed by anyone in the company. For the time being, Bitfinex has suspended all trading.
  • If no one from inside the company was involved in the hack wouldn't it have been extremely difficult for the hackers to crack a system protected by cryptology? I am not a technical expert, but I have heard that such cryptology is virually hack proof without inside knowledge of codes and keys.
  • It's completely mindblowing to think these huge amounts of money can be stolen so easily - just a few encryption keys is all they have to steal in order to control millions of dollars worth of currency. It's frightening but also quite exhilirating too, although I have no doubt those being asked to swallow some % of this loss "for the greater good" would have a different word for it. We definitely need to secure this technology better before it becomes fully widespread, or the hackers and criminals will soon be richer than the governments!
  • What is a bitcoin exactly. A dollar bill is a tangible, concrete physical object in the real world; made of paper and ink, emblazoned with the image of USA's first president Washington, symbols of a mystical, (and political) perhaps masonic nature and the theistic affirmation "In God we Trust." I can relate to the dollar bill it is familiar, I grew up with it...yet when I think about it's various elements it too seems a bit exotic and strange. But somehow I can still imagine 72 million of these bills being stolen, but Bitcoins don't really exist except in computers as a form of stored data, right? They don't seem real somehow. But the world is changing, once upon a time paper money was a mind blowing innovation. Future shock I suppose is now for some of us older folk.

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