Hackers Swipe 14% of Top Cryptocurrencies

Roughly one in seven units of each of the major cryptocurrencies in circulation has gone into the hands of hackers, says an Autonomous Research executive.

Over the past decade, we watched with excitement as the cryptocurrency market quickly ditched its niche status to become a remarkable worldwide phenomenon.

Bitcoin, the currency that led this ride into glory, went through some rough patches in 2014, when Mt. Gox, one of the biggest exchanges, suffered an attack and sank below the horizon.

Although the blockchain itself is a highly secure construct, the surrounding ecosystem remains susceptible to breaches, as investors have learned the hard way.

Lex Sokolin, fintech strategy director at Autonomous Research, said that hackers had stolen $1.2 billion in Bitcoin and Ether in under a decade.

This estimate does not account for the market value the cryptocurrencies have gained as a result of their explosive growth in 2017.

“It looks like crypto hacking is a $200 million annual revenue industry,” he said.

To provide a better perspective, Sokolin noted that the $1.2 billion in stolen assets represents a little over 14% of the entire supply.

Security issues didn’t seem to faze companies, which were more than willing to enter the cryptocurrency space.

In total, they have lost $11.3 billion from illegitimate transactions, estimates WinterGreen Research CEO Susan Eustis.

According to Forrester Research analyst Andras Cser, blockchains offer greater rewards for hackers than simple retail databases.

“You have much more information you can steal,” he said.

He may be right about blockchains, but hackers don’t even have to go that far.

The market is ripe for the picking since 90% of mobile cryptocurrency applications are vulnerable to various types of attacks.

Some wallets have already suffered exploits, leaving several people penniless.

Perhaps the largest incident in recent history happened last month, when Nicehash, one of the biggest cloud-based mining pools, lost $64 million as Bitcoin’s price topped $14,000.

These cybersecurity incidents should be a signal to all market operators that they need to focus on hardening their infrastructures before more hackers take advantage of flaws in their systems.