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Bitcoin and the “Pony” Botnet

Bitcoin and the “Pony” Botnet

Many media sources including Reuters have recently reported a virus that has infected hundreds of thousands of computers called “Pony.” The virus is an ambitious cyber attack whereby bitcoins and other digital currencies are stolen through virtual “wallets” being compromised (estimates are that 85 of these virtual wallets have been stolen.)

What must be understood is that this breach is not related to bitcoins or the digital currency system in general, and instead is an attack on the unsecured “wallets” themselves that many bitcoin users store their currency within. In a statement from a representative from the Bitcoin Foundation, users are encouraged to store their currencies offline in a secure location. “Electronic wallet security continues to improve by leaps and bounds as hardware wallets become available and we start to see software wallets that support multi-signature transactions,” said the Bitcoin Foundation’s director of public affairs, Jinyoung Lee Englund. These types of improvements continue to advance the widespread acceptance of alternative currencies worldwide.

To understand the nature of the breach itself, one must have an understanding of what a “botnet attack” is, and how to avoid being the subject of one. Botnets are vast collections of virus-infected computers worldwide which are controlled remotely from a control center. The nature of the infection that enslaves computers to turn them into members of a botnet ring are like all other viruses that computer users are subject to, and can be acquired by the same methods. The botents proceed to steal data from the infected computers, as well as delivering malware to uninfected computers. After the computers controlling the digital “wallets” are enslaved through the virus, the bitcoins held in the wallet are “mined” and claimed as the property of the attacker.

If you suspect that your digital wallet may have been compromised, you can visit the following website to check the credentials: bit.ly/1epIUiH

It is important to once again reiterate that this is not a compromise of the bitcoin system itself, or digital currencies of any kind. It is the same kind of virus compromise that steals unsuspecting computer user’s credit card information and bank account numbers, as well as social media passwords. Virus attacks of this kind are not reflective of weaknesses within the currency system themselves, but instead exploit users lack of understanding about security. Bitcoin as a digital currency is as secure as it has ever been, and the issues surrounding it’s adoption as a widespread monetary system are many times exploited by the media in order to create fear and uncertainty about it, so as to keep the current systems that it threatens in place.

My best advice is to convert your Bitcoins to cash. The next best thing is to store them in different wallets and spread the risk. You can also store them on trading sites. There is as suggested above the option of storing off line but the technology that must be understood to do this is time consuming.