NiceHash Hacked

After more than 10 hours of being down, NiceHash came up with an official press release– stating they got hacked!

Unfortunately, according to this release, it’s not just a security hole they’re trying to patch- their Bitcoin wallet has been compromised, meaning millions of dollars(in Bitcoins) could be lost, and who knows what else.

What’s even more troublesome is that this is not an isolated case. In 2014, Mt. Gox, the largest crypto exchange platform at the time, got hacked. Once handling around 70% of all Bitcoin transactions worldwide, they eventually filed for bankruptcy and had to close their platform, due to 850.000 Bitcoins being stolen($450 million worth at that time)!

At the moment it’s not clear if NiceHash will survive this attack, and if prosecutors will be able to find the attacker(s), but it’s safe to say that I was lucky enough to withdraw all my earnings from NiceHash yesterday.

Lesson learned

Although most cryptocurrencies are much more secure and more anonymous than “regular” currencies, we are still responsible for the security of our own crypto wallet.

While temporarily storing the cryptocurrency in an online wallet temporarily is okay(be it on exchange or a mining pool), when your wallet gets fatter, it’s a smart choice to move those earnings into your own wallet(desktop, hardware or even paper one).

As proven time and time again, the big systems are faultier than the simple ones and have more security holes. They are also more attractive to hackers as #1- they are much more worthy, and #2- it’s easier to identify their wallets.

What next?

For those of you who held a significant amount of Bitcoins on NiceHash, and those guys who created and/or work for NiceHash- I hope NiceHash will overcome this attack and together with prosecutors bring the attacker(s) to justice.

This is a very serious matter, and for many miners(especially those who have confidently stored large amounts on NiceHash), this could be a disaster. I wouldn’t want to be in their skin, waiting for more details about this attack and fearing of losing it all.

Still, those guys and we, the smaller miners, have another thing to think about- will NiceHash eventually come back and continue? Or are they done? Whatever the answers to these questions are, it could take days or weeks to get them, and time is money- especially in crypto mining business.

While we can always use other pools, NiceHash offered something fairly unique for miners- mining algorithm switch based on the best profitability and payment in Bitcoin, both of which I loved.

I’ve spent most of my afternoon looking at the alternatives, and I’ll write about that as soon as I find some that work.

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