How Thieves Manage To Steal Cryptocurrency In Virtual World
Bitcoin and other cryptos are bought, sold and stored on exchanges in the virtual world.
US officials announced on Tuesday they had recovered $3.6 billion of bitcoin stolen in a 2016, throwing a light on the scams that surround cryptocurrency.
But how exactly do criminals steal in the virtual world?
Hacking the exchanges
Bitcoin and other cryptocurrencies are bought, sold and stored on exchanges, just like commodities in the non-virtual world.
But crypto investors, and those who organise exchanges, often object to centralised control and reject stringent oversight -- and that sometimes leads to lax security.
"Exchange sites have stocks that are relatively large at any given time in crypto," says Manuel Valente of Coinhouse, a French company that manages crypto transactions.
"But these are servers, machines -- and malicious people sometimes manage to get into their servers and steal money."
Most of these problems are caused by weak security, he says.
Alexander Stachtchenko of KPMG agrees, pointing out that some platforms still store passwords on their servers.
"If you can get into the server you can steal the passwords," he says. "Once you have the passwords, you move the bitcoins from one address to another and then people don't have access to those bitcoins."
Hacking the blockchain
All things crypto rely on the blockchain -- a chain of code composed of interlocking blocks. It stores the details of all transactions made in cryptocurrency.
Because each block is linked, it is impossible to change a block of code without altering the whole chain -- the basis of the security claims made by those who trumpet the benefits of crypto.
However, there is a theory that if a group was to obtain more than 50 percent of a particular blockchain, it
Read more on ndtv.com
