33pc of all bitcoin exchanges were hacked between 2009 and 2015

6 Sep 2016

A new study analysing the security of the cryptocurrency bitcoin has revealed the startling find that between its formation in 2009 and March 2015, 33pc of all bitcoin exchanges were hacked.

The fragility of the bitcoin ecosystem has been shown a number of times in recent years, most recently with the theft of 120,000 bitcoins worth around €57m from the Hong Kong-based exchange, Bitfinex, last month.

The theft was considered so large, in fact, that the cryptocurrency’s price dropped by 20pc overnight as the market went into shock.

Future Human

Now, a new US Department of Homeland Security study has been made available to Reuters revealing some startling facts about the sheer scale of bitcoin-related hacks.

The results revealed that between 2009, when the cryptocurrency was founded, up until March 2015, 33pc of the world’s bitcoin exchanges were hacked.

Due to the lack of insurance available to bitcoin exchanges in the event of a major security breach, it is unsurprising to find that the study also found that, during this same period, nearly half of all exchanges were forced to close.

Traditional banks less at risk

When compared with available data about traditional banks and stock exchanges, the number of successful hacks is considerably higher among the bitcoin exchanges.

For example, a study of 6,000 US banks between 2009 and 2015 found that 67 banks were breached, equating to 1pc.

Yet stock exchanges were found to be more vulnerable, with data recently released by the International Organization of Securities Commissions and World Federation of Exchanges showing that more than half of the 48 US exchanges had come under attack at some point.

When it comes to prevention of breaches of bitcoin exchanges, the author of the report, Tyler Moore, is quite sceptical of a potential “silver bullet” that could solve the problem.

“No technology, cryptocurrency, or financial mechanism can be made safe from hacks,” he said.

Bitcoin security image via Shutterstock

Colm Gorey was a senior journalist with Silicon Republic