Apparently hacking crypto currencies is a $200 million annual revenue industry. That’s according to Lex Sokolin, who was asked by Bloomberg’s Olga Kharif. Kharif writes that in less than a decade, $1.2 billion worth of bitcoin and ether have been stolen from their legitimate owners. She continues:
All told, hacks involving cryptocurrencies like Bitcoin have cost companies and governments $11.3 billion through lost potential tax revenue from coin sales and illegitimate transactions, according to Susan Eustis, chief executive officer of WinterGreen Research. The blockchain ecosystem — the decentralized “distributed ledgers” that track crypto transactions — is also vulnerable.
Those losses could snowball as more companies and investors rush into the white-hot cryptocurrency market without weighing the dangers or taking steps to protect themselves.
Blockchain records are shared, making them hard to alter, so some users see them as super-secure. But in many ways they are no safer than any other software, Matt Suiche, who runs the blockchain security company Comae Technologies, said in a phone interview.
And since the market is immature, blockchains may even be more vulnerable than other software. There are thousands of them, each with its own bugs. Until the field is winnowed to a few favorites, as happened with web browsers, securing them all will be a challenge.
“Each implementation is going to have its own problems,” Suiche said. “The more implementations, the harder it is to cover all of them.”
Blockchains can track identity information, property records and even digital car keys, not just cryptocurrency. But of course, they do that too, and stolen Bitcoins can be converted into hard cash.
So while hacking a blockchain may be harder than breaking into a retailer’s database, “the rewards are greater,” according to Andras Cser, an analyst at Forrester Research. “You have much more information you can steal.”
Read more here.
Jeremy Jones, CFA
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