Cryptocurrency Security not Keeping up with the Blockchain

When Bitcoin and the Blockchain were introduced into the market place, one of the most attractive parts of the design was the security of the data and the near in-hackability of the data, this does not seem to be echoed in the Cryptocurrency security itself.

When Bitcoin was created there was a need for wallets to hold the Bitcoins and so they were created. As the number of Cryptocurrencies grew, so did the different offerings of many wallets enter the marketplace.

The next step in the evolution of this Blockchain world has been the advent of Initial Coin Offerings, where blockchain based companies and their projects offer tokens to the marketplace for future use on their blockchain based technology based projects. There has been over $1 billion in contributions so far this year in capital raised through these crowdsales and there seems to be no slowing down.

Cryptocurrency Security & Transfers to ICOs

We have followed the issues that Insurex had during its ICO that eventually led to the ICO being halted. There was a hacker or group of hackers that stole large amounts of ETH during the crowdsale. InsureX is still trying to recover.
We then saw the story of CoinDash and their ICO being hacked which has resulted in stolen ETH reported from 7 – 10 million dollars. Another good source for information on this attack is from our friends at BitcoinChaser here: http://bitcoinchaser.com/ico-hub/coindash-hack

One of the cases we have been following is a crossover between security for ICOs and crypto-wallets, the story of the MyEtherWallet Phishing. Many of the ICO companies have been hacked and sending out fake emails from their slackbots to all registered informing them to take action regarding their MyEtherWallet accounts to ensure security. When the link is clicked, funds have been stolen from the wallets. This has been going on and continues to go on as we speak.

Cryptocurrency Security & Wallets

As we mentioned above there have been many issues with the cryptocurrency security related to wallets in the past and it continues as we move along. The latest such attack is one of the biggest and attention grabbing that we have seen.
Hackers have stolen approximately $32 million in ETH from 3 Parity Multisig Wallets.

According to tweets published by Proof of Existence creator Manual Araoz, the multisig wallets affected by this hack includes:

Edgeless Casino (@edgelessproject)
Swarm City (@swarmcitydapp)
æternity blockchain (@aetrnty)

Two good sources for the details of the hack are:

http://bitcoinchaser.com/parity-multi-sig-wallet-hack
http://www.financemagnates.com/cryptocurrency/news/hacker-stoles-32-million-worth-ethereum-3-multisig-wallets/

Cryptocurrency Security Conclusion

So the trend continues, as the peripherals to the Blockchain and its built in security protocols can not be upheld by the ICO companies offerings and the Wallets that hold the cryptocurrencies. There is obviously a strong need in these markets for an immediate investigation and improvement in their security measures to ensure that Users and Contributors do not lose confidence in the system as a whole.

More posts like this at https://urbancrypto.com/