Sunday 23 October 2016

Bitcoin users losing money to hackers, shutdowns

Simon Rowe

Published 11/08/2016 | 02:30


More than one in six bitcoin users worldwide has lost money as a result of hackers or exchange shutdowns, a new survey by an Irish company has found.

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A poll of 770 bitcoin users from 68 countries around the world, including Ireland, reveals that thousands of euro worth of bitcoin has been reported lost or stolen as a result of cyber hacking or from users losing access to their online wallets.

The survey by Bitcoin Marketing Team, an Irish-based agency, comes just days after a cyber attack on a Hong Kong- based bitcoin exchange saw users lose up to €57m, dealing a further blow to confidence in the virtual currency.

The same exchange was hit by a previous attack last May, and large caches of bitcoin disappeared from the Mt Gox exchange in 2014 when it declared bankruptcy.

"While respondents like the freedom of bitcoin, there are still many negative feelings around it, as highlighted in mentions of scams, loss of bitcoin due to technical reasons, or hacks," said Jamie McCormick, the co-ordinator of the survey.

"We wanted to stimulate debate about bitcoin by conducting this worldwide poll," said Mr McCormick.

"With a lack of primary research in this area and with many research papers on the industry behind rather large paywalls that can be prohibitively expensive for normal bitcoin users, students, academics and startups to access, we want to make the result available freely for the community and industry," he said.

"Bitcoin is popular with users and is growing in popularity because it is seen as revolutionary, fast and anonymous."

Two-thirds of surveyed had sent or received a bitcoin transaction in the previous week.

However, it is still a largely male-dominated market, according to the survey findings. "The age profile of bitcoin users is heavily male with a small proportion of female bitcoin users, and mainly falling within the early 20s to late 40s bracket, and few respondents under the age of 18," said Mr McCormick.

"Active efforts were made to target female bitcoin users to attempt and have a balanced number of responses. But despite sustained efforts and targeting advertising campaigns, only 5.7pc of responses came from females, 2.5pc chose not to specify, with the remaining 91.8pc being male," he said.

Bitcoin gambling is an area set for rapid growth, said McCormick. While it only accounts for a tiny percentage of online gambling revenues at present, bitcoin's advantages in terms of low-cost, speedy payments means that cryptocurrency-based gambling firms are on the rise.

"When asked about gambling bitcoin, 44pc of respondents said they have gambled with bitcoin.

Dice roll sites, followed by sports betting and casino games, are the most popular among those gambling bitcoin," said Mr McCormick.

Ireland is leading the way in developing the tech infrastructure behind the boom in bitcoin gambling.

A fourth-year computer science student at Trinity College Dublin is aiming to revolutionise the poker world with a decentralised, bitcoin-based online poker site.

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