Much losses, many hurt: Dogecoin loses €40,000 in heist

14 May 20141 Share

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Aside from bitcoin, dogecoin is perhaps the second most well-known online cryptocurrency and it has now joined the ranks of currencies hit by online bank heists, this time to the tune of €40,000.

The group behind the monitoring and regulation of the currency, DogeVault.com, issued a statement on Tuesday admitting it has become the latest currency to suffer an online attack – in particular the dogecoin wallets used by people to store the currency.

The site is now down for an unknown period of time until the company can trace the origin of the attack.

As soon as the administrator of Doge Vault was alerted, the service was halted. The attackers had already accessed and destroyed all data on the hosted virtual machines, said the statement.

“We are currently in the process of identifying the extent of the attack and potential impact on users’ funds. This involves salvaging existing wallet data from an off-site backup. We will also closely be investigating potential attack vectors, and determining the security breach which enabled the attackers to compromise the service.”

According to ArsTechnica, the attackers created a new wallet to store the stolen currency of 121,550,030 dogecoins, which equates to €40,000 (US$56,000).

Dogecoin differs from bitcoin in that there is no limit to the number of coins that can be produced, making it an inflationary currency, while bitcoin only has a set number, which explains why €1 is the equivalent of 0.004BTC at the current exchange rate.

Despite some retailers dipping their toes in the water in terms of adopting cryptocurrency, the number of incidents of missing funds, such as the closure of the Mt Gox bitcoin exchange earlier this year, have prolonged retailers’ hesitancy in integrating it further within their businesses.

Colm Gorey is a journalist with Siliconrepublic.com

editorial@siliconrepublic.com