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Bitcoin confidence shaken after Bitfloor hack

The image of Bitcoin as a reliable option for investment and online transactions, has been hit once again, after trading site Bitfloor was hit by hackers – leading to the loss of over 24,000 (£160,000) of the digital currency.

Wired reports, that the hackers were able to gain access to a server with an unencrypted backup of the wallet keys, that give access to the bitcoins. Considering the originals were stored on an encrypted server, many of the site’s users are wondering why an unencrypted backup was kept at all. Owner of Bitfloor, Roman Shtylman, took to the site’s official forums to explain the situation to users, to apologise and to ask that members not create a panic by madly withdrawing their savings. He said that it was a massive oversight to have kept unsecured passwords anywhere, but did assure them that since hackers hadn’t taken any of the exchange’s US dollar reserves, everyone would get paid eventually.

For now trading has been completely halted on the site, with visitors to BitFloor.com being greeted by the following message:

Bitfloor
Imagine if your bank had something like this on its site

Unfortuantely Mr Shtylman has done more than just harm the image of his exchange with his mistake, he’s helped put the future of Bitcoins in jeapardy. While the relative untraceable nature of the currency should mean it will always have a home with online drug trafficers and causes that warrant anonymous interaction – sites like Wikileaks are a prime example – instances where average citizens could have their fortunes ruined by an idiotic blunder make it hard to see how people will continue to put their faith in the currency.

KitGuru Says: Do instances like this make you guys less likely to buy up a few bitcoins, or do you think it was naive to use a service like BitFloor in the first place? Let us know below, or on the KitGuru Facebook page.

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