2020 Bitcoin and Altcoin Hacks [Part 12]

This article is part of our complete guide to Bitcoin and altcoin hacks. Here we cover Bitcoin and altcoin security incidents from the year 2020.

2020 has been an unusual year from multiple angles. The COVID-19 pandemic took investors on a wild ride, with Bitcoin ranging from U$ 4,100 to U$ 12,200 in the first 6 months of the year.

June – Wallet Brute Forced

In June 2020, Lightning Network developer John Cantrell was able to brute force a Bitcoin wallet to recover its keys in under 30 hours.

This is a grassroots Bitcoin hack, in the sense that Cantrell actually did beat the cryptographic system at what it was supposed to do best – avoid brute force.

What he did was try permutations of 12 word mnemonics used to recover a wallet. The process involved :

  • Building the 12 word combination
  • Deriving the private key from the new mnemonic
  • Deriving the public key from the private one
  • Deriving a public Bitcoin address from the public key
  • Testing this Bitcoin address against his target

To achieve this, Cantrell implemented his own brute force software in OpenCL – an open standard for GPU processing. Find technical details here.

July – The Twitter Hack

Every major news outlet has called the July Twitter hack a “Bitcoin hack”. This is an incorrect approach that shows just how much the media is biased against cryptocurrencies in general.

Calling the Twitter hack a “Bitcoin scam” is like calling every bank robbery a “dollar scam”.

However, there are some aspects about this hack we could discuss in the context of cryptocurrencies. Especially how amateurish it all seems to be.

As Larry Cernak of The Block pointed out, the subsequent Bitcoin mixing job was absolutely sloppy.

It’s trivial for law enforcement to track down whoever is behind this Bitcoin activity.

As we’ve pointed out in previous articles, Bitcoin is a permanent and immutable record of financial transactions. Doing anything illegal on the blockchain generates a trace that lasts forever. Contrary to the mostly negative image of cryptocurrencies propagated by mainstream media, blockchain makes transactions much more transparent than other financial instruments used by criminals.

Return to the main article: The complete guide to Bitcoin and altcoin hacks

Meta