A lot of people that have spent a lot of time and money mining the altcoin Dogecoin
have found themselves with a very unsavory Christmas surprise. They lost thousands (some millions) of their Dogecoins that they had sitting in their DogeWallets. For those unfamiliar with Dogecoin, it is yet another cryptocurrency built on the Doge meme
is a place where people can store their Dogecoins and monitor their growth, expenditure and have an easily accessible place to get to their coins. However, if you know anything about cryptocurrencies, you know that there have been countless hacks of online BitCoin
pools, exchanges and personal accounts. The only way of keeping your BitCoins safe is to store them offline in an encrypted hard drive.
The guys running Dogewallet explained in a Reddit Thread
what appeared to have happened, as well as on the Dogewallet site
, which was temporarily offline once the hack had been discovered. Simply put, this is what they claim to have happened, "We found many reports of Dogewallet transactions being sent to 'DQT9WcqmUyyccrxQvSrjcFCqRxt8eVBLx8'. We're currently looking at logs and have found thousands of attempts to hack our systems. Specifically, the attack originated from the hacker gaining access to our filesystem and modifying the send/receive page to send to a static address. We're currently reviewing logs for information. The site is shut down right now.We're incredibly sorry to all users who lost funds from the attack. Please use offline wallets as online wallets are meant for new users who aren't using them as a storage of coins. Offline wallets are more safe and secure than any online wallet due to possible attacks that can originate from anyone, anywhere."
They left a much more detailed explanation on the Reddit explanation thread
mentioned above, but they also said that those affected could expect the following,"All invested user balances will be fully compensated first. We'll be working on compensating as much balance as possible that wasn't invested right after (roughly 15-30m can be compensated immediately). Send me a Reddit message with your information and address if you had an investment (not balance) on the site."
What I find odd is that they seem to be doing all of this over Reddit and personal messages instead of email or any semi-secure method of communication. It all seems very amateur and possibly explains why all of this even happened to begin with. Personally, when it comes to a large cryptocurrency heist my first suspicions are actually turned towards those running the site since these online pools are run purely on honor that the owners simply won't run off with the money. This is clearly a flawed system when you have an anonymous currency with no accountability and no way to really trace transactions.
There are also a lot of people on the Dogecoin forum
discussing how much money they lost and how they lost it. Now, to get things into perspective, one Dogecoin is nowhere near the value of a BitCoin as the current exchange rate of a Dogecoin is about $600 USD per 1 million. Which would put the estimated value of this current heist at around 20-30 million Dogecoins or about $12,000- $18,000. This isn't a crazy amount of money to run off with, but some fishy things still appear to be occurring with the person/people running Dogewallet including the fact that they pulled their Facebook page and deleted a bunch of their accounts. Very dodgy stuff if you ask me.
As I've said before, online cryptocoin wallets are a complete and utter joke and keeping any money online is a ridiculous idea considering how little security or regulation exists for these currencies. They don't have to abide by any online banking rules. We've already reported the effects that cryptocoins have had on real GPU sales, but the truth is that cryptocoins continually get hit with these kinds of events. They are new and people need to establish rules and regulations among eachother in a wild west cryptocurrency world. I don't think this will hurt BitCoin or Litecoin in terms of representation or perception, but I do think this memecoin will affect how other altcoins are seen.
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