The sharp rise in value of cryptocurrencies like Bitcoin, Ether and Monero has led to windfall profits for early investors. However, this increase has some unintentional and unwelcome consequence, including crypto jacking, cyber security threats and growing electric consumption.
Despite recent warnings and increasing concerns about a ‘bubble’, investors have continued to embrace cryptocurrency.
However, it has become increasingly obvious that the increase in cryptocurrency prices have attracted the attention of a few rotten individuals eager to get their hands on their own ‘coins’.
Theoretically speaking, cryptocurrency is considered as andultra-secure’ system defined by a decentralized, distributed ledger that records all transactions, and is completely accessible by and transparent to all nodes on the network.
Each node on the network is updated with every new transaction, which means there is no single database and therefore, no single point of failure. This sounds great from a security perspective, right? Maybe.
While the distributed nature of blockchains does help remove what we call the “single point of failure vulnerability”, it also opens up a whole new category of vulnerability, which is also distributed like blockchain—cryptojacking.
In order to understand how this works, we need to know how cryptocurrency companies like Bitcoin, Ethereum and Monero ‘create’ new coins.
Unlike traditional printed money, cryptocurrencies like bitcoin are created through ‘mining’—the act of using software to solve highly complicated mathematical problems in exchange for digital coins.
The mining system was designed for maximum security due to the completely transparent manner in which new coins are made visible to all system users.
Unfortunately, the highly complicated math problems that need to be solved to generate these coins require huge amounts of computing power, and this is where cyber security vulnerability comes in.
As cryptocurrency values have increased in the last couple of years, hackers have gotten even more skilled at ‘hijacking’ computers to use their computing power to solve the problems required to create new coins.
According to a recent report by cyber security software company Symantec, cryptojacking attacks grew to a staggering 8,500% in 2017 alone.
These attacks normally require only a couple of lines of code to carry out and can result to the slowing down of devices, overheating of batteries and in some cases, the shutting down of computers.
Cryptojacking is only one among the numerous challenges afflicting the growing cryptocurrency market.