This is an important period in the history of bitcoin, with the virtual currency due to trade on major U.S. exchanges. However, its ability to be exploited was highlighted again this week, and questions will once again be raised regarding the viability of the cryptocurrency.
A bitcoin mining company in Slovenia has been hacked and potentially lost tens of millions of dollars’ worth of bitcoins. NiceHash, a mining company that mines the currency for paying customers says it was breached. A security investigation is now underway.
The company says it will stop operations for 24 hours and verify how much bitcoin was stolen. The number is 4,700, according to research company Coindesk. Over recent weeks, the price of bitcoins has escalated, mirroring an upward trend throughout 2017.
Throughout this year, the currency has been exploding in value, moving from $1,000 at the start of 2017 to $15,000 early today. Taking the new valuation into account, 4,700 stole bitcoins would mean a value over $70 million was stolen from NiceHash.
“The incident has been reported to the relevant authorities and law enforcement and we are cooperating with them as a matter of urgency,” the firm says.
The attack comes at a bad time for the virtual currency. Bitcoin will be traded on two U.S. exchanges this month. Futures for bitcoin will begin trading on the Chicago Board Options Exchange on Sunday and on rival CME Group’s platforms later in the month.
This hack will not stop that process getting underway. However, it does shine a light on the dangers of bitcoin and that it is possible to steal vast sums in a short space of time. Many have questioned the current viability of virtual currency, including an executive with the Bank of Japan. Those critics will feel justified in the opinion that bitcoin is not ready to replace physical money.
The rising value of bitcoin resulted in the first billionaires of the currency this week. Facebook foes, the Brothers Winklevoss surpassed the landmark at the start of the week. That was when the currency was valued at $10,000.