Marzena Trembecka
Marzena Trembecka

Ethereum cryptocurrency exposed to a cyberattack risk

The cryptocurrency market is very attractive not only to investors and private persons but also to cybercriminals. Virtual currencies enable a quite rapid manner of earning a lot.

In July, there was information that Ethereum virtual currency of the value of USD 34 mln was stolen.

Ethereum - an alternative for Bitcoin?

Ethereum cryptocurrency (ETH) is an alternative for Bitcoin. Ethereum is an open-source programming language which like Bitcoin uses decentralised and distributed blockchain database.

Within the last few months, Ethereum stock exchange registered an increase. This made this currency a profitable investment. Since 2016, the Ethereum price was growing steadily and in March it reached USD 50. It means that in the last three months, Ethereum value grew by 273.7% and within two months - 350%.

Ethereum limitations

Cryptocurrencies are more and more expensive because they are resistant to inflation. They are also not regulated by any institution which would manipulate its stock exchange. Ethereum, like Bitcoin, has a limited quantity of emitting new units. In the event of Bitcoin, there may be not more than 21 000 000, and as far as Ethereum is concerned, there is a limitation of 18 000 000 units annually. The easy performance of transfers and transactions makes them more popular. Every year they are more trusted but at the same time they are an ideal target of cybercriminals.

The interest of cybercriminals

The attractiveness, anonymity and scale of using cryptocurrencies make them very popular among hackers. Within the last few years, we have observed hacker attacks at cryptocurrency stock exchange markets and Bitcoins theft. Recently, the cryptocurrency market has been attacked again.

Within the last weeks, hackers managed to steal Ethereum cryptocurrency twice. During the first attack, Ethereum with the value of USD 10.3 mln was stolen from CoinDash. During the second attack, hackers stole ETH 153 000 in total equalling USD 34 000 000. They used ICO Veritaserum. ICO (Initial Coin Offerings) is a method of collecting funds by start-ups in the form of coins before the project is completed. Then, they are replaced with tokens acting as a mother currency, in this case Ethereum.

How to protect ourselves?

The amount stolen could have been much higher. But the rapid response of hackers from "white hats" allowed for the excavation and securing of ETH 377 000 equalling USD 85 000 000. The secured money waits for returning to owners. Each hacker attack on cryptocurrency markets entails large losses. These are not only high financial losses but also a rapid drop in the digital currency stock exchange rate. That was not different in the event of Etherneum whose value dropped from USD 400 to USD 220.

Each cyberattack on cryptocurrency markets shows how great responsibility is borne by their owners. If they do not ensure proper safety of virtual money, they will lose the trust of their customers which will stop using their services. Therefore, there are dedicated tools created which increase the protection of cryptocurrency markets. At Grey Wizard we created Grey Wizard Shield - a dedicated product which guarantees security. The technology based on machine learning ensures the rapid detection of an attack and instantaneous response.

Andrzej Prałat
Marzena Trembecka

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