The question of Bitcoin's security is increasingly important, particularly as the price of the leading cryptocurrency continues its meteoric rise. Proponents of Bitcoin suggest that the digital currency is protected against theft and fraud by various encryption measures, the logging of transactions on the Blockchain, and Bitcoin's decentralized status. Skeptics, on the other hand, argue that any digital currency is susceptible to theft and fraud in ways that other types of currencies are not. As the price of the currency continues to increase, it's likely that hackers and thieves will look for new ways to manipulate and steal Bitcoin. A recent incident points to a new type of malware used for just these purposes.
Malware Used to Steal 13 Bitcoins
A report by Coin Telegraph reveals that a Bitcoin user was recently the target of a malware scheme designed to steal Bitcoins. The malware was successful in this case, and the user lost 13 Bitcoins thanks to the thieves' efforts. How did this happen, particularly as security efforts continue to improve?
According to the anonymous user, who wrote about the experience on Reddit, the malware stole the coins by replacing their destination address during a transaction. "I copy-pasted BTC address into Electrum and confirmed the Bitcoin transaction. The clipboard replaced my...Bitcoin address with a different one. Few minutes later I discuss[ed] with [a] friend if he already sees it in his wallet. He didn't. It sent to [the] wrong address," the user explained.
Halting Transaction Proved Unsuccessful
Recognizing that something unusual had taken place, the user attempted to halt the transaction before it could be confirmed. However, this was not successful. It is possible that the malware utilized a clipboard-altering program which has become increasingly common in various hacking scams in recent years.
How could this user (or others in a similar position) have successfully guarded against this type of theft? One way to increase security would be to back up all Bitcoin funds and transactions with a hardware wallet. These wallets "securely" display a destination wallet address before confirmation of the transaction takes place. That being said, with Bitcoin technology developing at a rapid pace, what works as a security measure today may not be secure for long.
The most recent malware incident points to other concerns about Bitcoin. In spite of the anonymous user's attempts to halt the transaction, the currency transfer was nonetheless confirmed. Perhaps this incident warrants further discussion among the Bitcoin community about how to protect against these incidents when they do occur. As this particular theft occurred just days ago, it is possible that the user will eventually recover his or her Bitcoins. However, the fact that the transaction was allowed to proceed even in spite of the unusual circumstances may give some Bitcoin users pause before exchanging in the future.