Recent Fiascos Put Blockchain’s Reputation on the Line

Dec 19, 2014
Blockchain

Blockchain

Blockchain.info wallets getting hacked is not a new story. There have been instances in the previous years where users reported mysterious disappearances of their bitcoins. Whether true or not, this already gives a glimpse of the strength of the wallet service provider’s security.

However, with the recent fiasco Blockchain has got itself into with the white hat hacker that comes by the name of Johoe, its reputation of being a secure platform is now being questioned.

‘Gentleman’ hacker finds a loophole

Based on the hacker’s transaction history on Blockchain, the Bitcoin wallet address has received more than 800 BTC from various Blockchain wallets starting this month.

Being a ‘good Samaritan’ as other bitcoiners call him, Johoe began returning the illegally acquired bitcoins soon after expressing his intention to merely point out the flaw in Blockchain’s security system.

According to interviews and reports, he used the repeated R values in order to determine the private keys of the wallet addresses, from which he had acquired the sum from.

BlockchainIs there more than one hacker?

However, amid the Johoe incident, some users still claim that their wallets have been compromised despite the necessary protective measures in place.

For instance, a Blockchain account that is secured by a two-factor authentication via SMS verification as well as a restriction to a single IP and a block on TOR-related IP addresses was still accessed without the user’s consent, resulting in a 20 BTC deficit on two different occasions.

An online complainant who calls himself JJ said that the wallet service provider stopped responding to his inquiries after initially suggesting that a malware might have infected his computer, and therefore, it is responsible for the loss of bitcoins.

He then shared his assumption that perhaps there are other hackers joining the party and added that:

“Blockchain have every reason not to admit that something really bad had happened there but for the sake of the future of Bitcoin I would strongly hope that they will do something to stop this insanity and clean their own mess.”

Hacking incidents cause alarm among Bitcoin bettors

Among the wallet owners of Blockchain are the Bitcoin casino enthusiasts, and this is partly due to the fact that it is one of the most accessible Bitcoin wallets online. Moreover, it can be used for any Bitcoin transactions, unlike Coinbase that prohibits participation in any gambling activities on the web.

In the event that the security issues continue to plague Blockchain, there is a possibility that the Bitcoin gambling market will be among the niches that will leave the troubled company in order to salvage the coins.

Regardless, players may still be able to wager on the Bitcoin games using different wallets, provided that the latter is compatible with the casino or gambling site.

Disclaimer: The source of this article is an anonymous well-informed member of the Bitcoin community who has requested to remain nameless.