Bitcoin theft costs users over half a million pounds

Thieves have pilfered a significant haul of bitcoins after hacking into one of the world’s largest wallet services for the virtual currency.

4,100 bitcoins worth £650,000 were stolen in two different attacks and the Australian man that suffered the theft stated that he wouldn’t report the act to the police due to the fact that bitcoin transactions are almost impossible to trace.

The theft reportedly took place on 26 October with the Sydney Morning Herald reporting that users weren’t actually informed of the theft until over a week after it happened through a message left on the site.

"I know this doesn't mean much, but I'm sorry, and saying that I'm very sad that this has happened is an understatement. Please don't store bitcoins on an internet-connected device, regardless if it is your own or a service's,” read a statement from the site owner who goes by the online alias TradeFortress

The BBC reports that some users of the site have speculated the theft is an “inside job” with the owner denying that this is the case with the truth likely to come out in the coming weeks and months.

Researchers asserted last week that the digital currency is vulnerable to exploitation and implosion due to “selfish miners” that could hijack the system using the conditions currently in place. Ittay Eyal and Emin Gun Sirer, computer scientists at Cornell University, claimed that the miners in question would only need a 33 per cent share of the computational power being used worldwide to create bitcoins to takeover and collapse the system.

bitcoin has gained notoriety in recent times following the arrest of Silk Road owner Ross Ulbricht as most of the fortune he stockpiled was in the digital currency with the FBI finding it nigh on impossible to recover the 600,000 digital coins – worth around £49.7 million.