London, UK, 4th Dec 2021, ZEXPRWIRECryptocurrencies are all the rage now. If you aren’t familiar with them, they are a peer-to-peer currency that has no central authority controlling them. They use cryptography to maintain a distributed public ledger and prevent counterfeiting, as well as transactions being verified by nodes in a consensus algorithm. FinancialCentre Broker Dennis Vinter shared that while not all cryptocurrencies are the same – some have pre-mined coins, some have a blockchain which is hard to maintain, and some have substantial differences – all the widely popular cryptocurrencies are peer-to-peer digital currencies that use cryptography to secure transactions.

The biggest cryptocurrency right now is Bitcoin which was created by a mysterious man named Satoshi Nakamoto in 2009 as an open-source project with no central authority controlling it. In addition, it uses a blockchain to maintain its ledger and prevent double-spending. The most popular alternative cryptocurrencies are probably Litecoin, Namecoin and Ripple. Cryptocurrencies have received massive attention in the past year due to explosive prices that made many early holders multi-millionaires without doing much at all.

Cryptocurrencies are decentralized, anonymous, and can easily be sent anywhere in the world without having to pay for international money transfers. They are also pseudo-anonymous – transactions are not linked to personal identities directly, but anyone who knows your public key can see how much money you have. They are often used for black market purposes due to this anonymity – it is hard to track transactions when the currency only exists in computers.

Bitcoin Mining

Bitcoin mining is the process of adding transaction records to Bitcoin’s public ledger, called the blockchain. It is designed so that mining becomes more difficult as more miners join the network. It requires increasingly powerful hardware resources to solve the cryptography problem in order to produce a correct hash. Mining is a record-keeping service. Miners make money doing this. In order to keep the blockchain consistent, every block contains a hash of the previous block. The SHA256 cryptographic hash function is used for this purpose. A mining node takes all the transactions, hashes them together and adds them to the block it is working on. It then repeatedly performs a cryptographic operation called a hash function on that block and all the transactions in it, and if the result is below a certain threshold value (i.e. looks like a random number), then it will be broadcast out to other nodes.

In this way, Bitcoin miners are actually being used to perform computational mathematics – they are being paid for their work, but this payment comes indirectly from users, who are sending bitcoins to each other for goods and services. In case a miner is lucky enough to find a block hash below the target threshold, they will get the newly created Bitcoins (12.5 BTC at present) plus transaction fees paid by senders whose transactions they include in their blocks.

Cloud accounts under attack

Just recently, Google made a shocking revelation that miners are making use of the compromised cloud accounts for mining new cryptos. The technology giant revealed in a blog post that cyberhackers have been on a mission to hunt for clouds that are not very well guarded and use them to mine new bitcoins and other cryptos. It was also mentioned that a total of 50 attacks were made on its clouds, and out of them, 10% were used to search other publicly available resources for vulnerable systems. Google further said that these attacks are usually a course of poor hygiene on the victim’s side.

The mining process is an essential part of the cryptocurrency network, and everyone has a role to play in maintaining it healthy. In addition, there are different types of cryptocurrencies that have their own consensus algorithms. Those who hold onto them all through these tough times will be doing themselves a favour in the long term. Mr Vinter says that these attacks are inevitable, especially with the value of cryptocurrencies rising.

When these attacks are made on public hash graphs, it is possible to steal computational power from unwitting victims for mining purposes. This practice is not new. However – cybercriminals have been performing it for years – but this latest discovery will only make both users and companies more aware of how to protect themselves. It was reported that cybercriminals who have the knowledge, tools and capabilities are draining cloud servers, leaving them devoid of computational power. This will hamper the day-to-day operations of these companies. More so, if the owners are not aware of the presence of malicious programmes on their networks that are already mining cryptocurrencies.

The business of mining for cryptocurrencies is a profitable one, and people want to get in on it however they can. The biggest problem with this is that although users may think they’re only running the software necessary for mining, there could be other things running in the background that nobody knows about until it’s too late.

Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own research before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.