BitcoinBitcoins are used as a form of payment between individuals. The digital currency uses a form of encryption that is able to regulate the generation of units of currency and verify the transfer of funds. A great deal of individuals find that using bitcoins is a much safer way of paying for items electronically as no single institution controls it meaning no bank can control their money.

Bitstamp however, Bitcoins primary bitcoin exchange has unfortunately been made to suspend their operations after an apparent hack that has lost them millions of dollars’ worth of virtual currency.  The company centred in Slovenia and the UK has stopped all withdrawals after the security breach and is advising customers to make no deposits.

Recognised as the 3rd busiest bitcoin exchange in the world they have said fewer than 19,000 bitcoins, around $5m has been lost. The remaining bitcoins however are untouched and being held in ‘cold storage’, computers that aren’t connected to the web making them untouchable to cyber attackers.

They said “Bitcoin customers can be rest assured that their bitcoins held with us before temporary suspension of services…are completely safe and will be honoured in full” An investigation into the attack has been launched and Bitstamp said they would “actively engage with law enforcement officials.” Source – https://www.ft.com/cms/s/0/668a1b0a-957d-11e4-b3a6-00144feabdc0.html#axzz3O97fOcGk

Bitcoin

This latest attack is suspected to raise more concerns over the security of bitcoins after MT Gox, once the largest exchange collapsed only last year following an attack by hackers.  The group that was based in Japan lost up to 850,000 bitcoin which comes close to $450m.

After such a large blow customers have become concerned over how to stay safe online and whether or not bitcoin is safe to trade with.  As a result bitcoins cryptocurrency has steadily fallen from a trading price of $1,240 to only $275.

For now Bitstamp remains closed but who knows what the future might bring.

Image sources:

https://www.extremetech.com/computing/164134-how-bitcoin-thieves-used-an-android-flaw-to-steal-money-and-how-it-affects-everyone-else

https://en.wikipedia.org/wiki/File:Bitstamp_Logo_2013.png