Looks like NiceHash was hacked to the tune of US$60Million, one of cryptocurrency’s biggest losses

Update Unfortunately NiceHash has confirmed there was a security breach. Read more here. While the Bitcoin price was busy breaking new record highs, one of the largest pool mining...

Update
Unfortunately NiceHash has confirmed there was a security breach. Read more here.

While the Bitcoin price was busy breaking new record highs, one of the largest pool mining services, NiceHash is offline. If you hit their website right now you’ll get an message about the service being in ‘Maintenance’, but as the hours roll on with no updates, users became concerned about the Bitcoin wallets stored with NiceHash. For those uninitiated, people use their hardware (and power) to perform the mining or computational calculations necessary to find altcoins. These are profitable for Bitcoin, which are ultimately exchanged for Bitcoin, a portion of which is returned to the users who contributed. NiceHash’s popularity was a result of both the simplicity to setup, but also their ability to automatically switch between mining different altcoins based on profitability.

The subreddit for NiceHash (https://reddit.com/r/nicehash) points to a transaction where around US$60 Million worth of Bitcoin (4,736 to be exact) was transferred. It was then subsequently transferred a few more times, incurring plenty of fees in the process. Since then the Bitcoin price has continued to rise, so the transaction (to whoever has the Bitcoin) is now worth US$62,092,450.26) at the time of writing.

The official Twitter account for the service posted 12 hours ago with this..

Then 9 hours ago, posted this..

Since then there’s been no communication on any of their social channels (listed on their maintenance page) and users are getting angry at the thought of loosing tens of thousands of dollars worth of Bitcoin.

The only site so for to get official comment in WikiTribune with this..

WikiTribune has been in contact with NiceHash, which said that it is “assessing the situation and working with the authorities. We’ll issue a public statement shortly.”

That sounds an awful lot like they’re knee-deep in investigation of what happened and if they still have a business or not. If it is worst case as many are predicting and its all gone (money and trust) then NiceHash will be over thanks to a NiceHack.

While this is another example of a single point of failure being an issue for wallet services, it serves as fodder for those mining experts to remind people to use cold storage to really protect your investment. This approach puts the responsibility fairly on your shoulders, which is exactly why using an online provider was an inviting prospect for many.

Last week, I wrote about NiceHash in relation to its simplicity to get into mining Bitcoin. If the hack turns out to be true and finances unrecoverable, then that simplicity came at an extremely high price. Some users will have taken transactions to non-NiceHash wallets and they’ll be fine, but they were paying a reasonable transaction cost to do so. Personally I had mined around A$40 in the few weeks since I started trying it out, so I’m by no means heartbroken, but for many, they’d purchased hardware specifically for mining with NiceHash.

If you fire up the NiceHash Miner, it’ll say its started mining, but never does and the balance is always at 0.00, including any pre-existing balances.

 I tried to see how broken the service was, so I filed a bug report, which ultimately would email NiceHash, as expected, that also failed. This isn’t looking good and may turn out to be one of the biggest news stories for the cryptocurrency world. Having a large marketplace and pool miner fail is ultimately bad for the industry, right when it was flying and receiving a ridiculous amount of mainstream media coverage, thanks to its continued skyrocketing price and the milestone of breaking the US$10,000 barrier.

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Cryptocurrency

Creator of techAU, Jason has spent the dozen+ years covering technology in Australia and around the world. Bringing a background in multimedia and passion for technology to the job, Cartwright delivers detailed product reviews, event coverage and industry news on a daily basis.