Earlier this week the cryptocurrency market was shocked by yet another large hack of a digital currency. This time it was Tether that was targetted. The company claims they have lost close to $31 million worth of digital tokens. Consequently, the hack has created turmoil on the market and now users are looking for an explanation as to what happened.
Tether is a unique cryptocurrency that can be used to exchange cash for digital tokens. The digital currency is essentially pegged to whatever currency an individual user needs, whether it be the American dollar (USD) or the Japanese yen (JPY). The currency has gained momentum lately and the amount of users is steadily growing. However, on Sunday, Tether took a huge hit.
According to the press release published on Tether’s website, the cryptocurrency lost nearly $31 million worth of digital tokens in a matter of minutes. The digital token included in the hack is called USDT and it is a digital currency pegged to the USD.
The developers behind Tether first said they wouldn’t redeem any of the lost coins. Instead, they stated that they would work to introduce measures that would ensure that the stolen coins couldn’t be reintroduced into the block. The same measures would also freeze all of the stolen tokens.
A few day’s later the people behind Omni Core Software, the platform Tether runs on, released a statement saying that they would develop an updated software that would let Tether regain the coins. As a result, it is a bit unclear whether the coins will be frozen, reintroduced, or just left on their own.
The Tether hack created a commotion on the market and made both Bitcoin and Ethereum drop significantly in price. However, both cryptocurrencies have already regained their pre-hack values and Bitcoin even broke an all-new record. But Bitcoin and Ethereum weren’t the only ones that got affected. The whole industry has suffered and the doubts about whether or not cryptocurrencies can be considered safe are growing stronger.
In this case, the main argument is that this is not the first cryptocurrency hack, but instead one of many. Despite the fact that the hacks are getting less frequent, it is creating a worry among users who want to be reassured that their money is kept safe.
Another issue that you might have noticed is that we mentioned that the developers of Tether “claim” the tokens were stolen. The reason we did this is because the involved cryptocurrency is anonymous and therefore no one can confirm or deny that the hack actually happened. Right now there is a big discussion going on online where users and cryptocurrencies experts are debating if the hack was a fraud.
We can’t comment on whether or not that is true, but we do recommend that you try to invest your time and money in more reliable currencies such as Bitcoin, Ethereum, and Litecoin. By investing in digital currencies that have a proven track record, you’ll have a bigger chance of staying safe.
With that said, this is not the first crypto hack to occur. In the summer of 2016, Bitfinex, who shares close ties with Tether, got hacked for Bitcoins worth a value of $66 million dollars. Before that, several other currencies and e-wallets for cryptocurrencies were hacked as well.