Bitcoin…Bubble or a sign of the future?

Posted on: 11 December 2017
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This month our Information and IT Security officer, Graeme Wolfe, looks at the recent rise in Bitcoin values and the security surrounding them.

You may have heard in the news this month about the rise in value of Bitcoin to over $17,000 for 1Bitcoin. Considering that bitcoins have been around for less than 10 years and for much of that time its value was in the 10’s or 100’s of dollars, you may be wondering what has happened recently. You are not alone.

Bitcoin is a cryptocurrency, not created or regulated by any central bank, but they are ‘mined’ by solving complex mathematical equations on computers.

Bitcoins are monitored by something called a ‘blockchain‘, which is a publicly accessible listing of all Bitcoin transactions and involves the use of Private Cryptographic Keys to keep it secure.

So far, so secure.

However, there are a number of ‘traders’ who are set up to enable the buying and selling of bitcoins and this is where the security of the system breaks down.

People who wish to trade in bitcoins often upload their Private Keys to these traders and then can buy and sell with ease.

This has attracted the attention of thieves and criminals who see the stealing of bitcoins as an easy way to make money. Certainly easier than trying to rob a bank!

In 2014 $460m was stolen from the Mt Gox trading site; in 2016 Bitfinex suffered a similar loss and only this month NiceHash suffered a similar breach.

Many of these traders were set up with poor security measures in place and through a combination of technology and social engineering, they have been hacked and the money stolen.

Whether you are trading Bitcoins, or just using online banking and shopping services, it is vital that you keep your security details safe, whether they be usernames and passwords, Cryptographic Keys, or simple ‘autofill’ options on web sites, keep them to yourself and be wary of where you enter them online, as they are all targets for online criminals to plunder.

Graeme Wolfe

Information and IT Security Officer

11/12/2017

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