Cryptocurrencies are relatively young and fragile, but already they’re under constant threats from cybercriminals. Just during this past week there have been multiple attacks on bitcoin exchanges, rendering their services useless and customers unable to buy, sell, or trade cryptocurrency.
Whether by accident or not, these attacks happened at the same time that investors’ interest in digital currencies has also gone through the roof. Cryptocurrencies are being rapidly adopted by multiple countries, institutions, services and agencies. Fundraising through ICOs is also reaching record heights, and people are starting to wonder if the cryptocurrency industry can handle that much attention all at once.
Experts on cryptocurrencies like the CEO and co-founder of a digital currency trading company Citizen Hex, Benjamin Roberts, say that investors must be very careful where they put their money. The more these organizations grow, the bigger the target is on their backs.
The increased number of attacks on bitcoin exchanges seems to confirm this point of view, and recently Bitfinex – which is the largest dollar-based exchange in the US – just reported a DDoS attack this Wednesday. The attack was attempting to increase the flow of data to the platform so that the system would end up paralyzed.
A similar attack also happened on Tuesday, but that one was dealt with within an hour. Still, despite the attack the exchange stated that most of their users wouldn’t be affected and services would resume to normal.
However, these two attacks weren’t an isolated incident. In fact, on Monday afternoon, a similar attack hit the BTC-e exchange. The fact is that these attacks aren’t really surprising for the seasoned trader, especially with the recent spike in interest in crypto markets.
That doesn’t mean that there’s no danger though, since cyber attack can have a quite the impact on the entire bitcoin market. For example, bitcoin’s price is set by multiple exchanges that are located around the world. If one of them was to be shut down, then the price differences could end up changing. There are also opportunists who are waiting for something like this to happen, and they would be ready to exploit the situation.
It’s true that the currency is still unstable, and on Monday, it even went down for $400 because of exchange problems. Only a day before that, it reached $3,000 for the first time ever, and on Wednesday, it went to $2,571. As you can see, each day is a different story. Hackers are taking advantage of the market instability to cause havoc with potential price manipulation in mind.
There’s also the issue of overwhelming traffic on the exchange websites. Coinbase for example, reported multiple complaints from customers who couldn’t access the website on Monday. The cause of the problems was simply too much traffic. Furthermore, Coinbase became inaccessible last night meaning users couldn’t transfer their coins or buy or sell cryptocurrency.
Bitcoin Exchanges are now breaking their records on a regular basis when it comes to unique viewers. At the same time, the business for these companies keeps on growing. Coinbase has even also recently opened 25 new positions as a response to this influx of business.
It is imperative that these services remain functional during peak times because it is necessary for Bitcoin’s growth. After all, we don’t want Bitcoin to look like it can’t handle an influx of users. If cryptocurrency services remain uninterrupted during busy times, it will show new investors that the industry is reliable and is ready for further growth. Let’s hope that these big Bitcoin exchanges enact preventative measures for future vulnerabilities and remain resilient to ongoing cyber attacks.
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