Dogecoin, the virtual currency that was named after a silly meme but has been described as a potential successor to Bitcoin, suffered its first hacking incident today, with Dogewallet users losing an estimated 21 million Dogecoins. The incident was confirmed by Dogewallet in a Reddit post after users reported disappearing Dogecoins on Doges.com’s forum. In an email, Dogewallet told us:
The hacking incident was extremely unfortunate for the Dogecoin community and all members of the Dogecoin community. We’re trying out best to make sure users can retrieve their lost Dogecoins.
Dogewallet is currently in the middle of refunding users, and several million Dogecoins have already been refunded today. Refunding users is our priority because we too want to see Dogecoin grow, not only because it’s backed by the best community of any digital currency, but because it also has the greatest potential to completely overtake and topple Bitcoin. This is exemplified by the community reaching out to help create a system for refunding affected users of Dogewallet just moments after the incident.
Lastly, we’d like to remind everyone to please use offline wallets as a means of storing any significant amount of Dogecoin. Online wallets are more convenient for new users and offer people the ability to learn about and use the currency immediately, but offline wallets offer the greatest security.
Dogewallet promised to fully refund all lost coins and has temporarily shut down its site. Angry users, however, are questioning why Dogewallet created a new Reddit account to respond to complaints and shutdown its Facebook page (link via Google Cache).
Each Dogecoin is currently worth about US$0.00057. Together, the stolen Dogecoins are the equivalent of about $12,000, which is not a massive amount, but still a loss for users who spent a lot of time accumulating the virtual currency.
In its Reddit post, Dogewallet said that they are “currently looking at logs and have found thousands of attempts to hack our systems.” The hacker gained access to Dogewallet’s filesystem and modified its send/receive page to send coins to a static address.
Along with several hacking attempts on Bitcoin wallets, the Dogecoin incident is a reminder that all online wallets are vulnerable to hacking.
“We’re incredibly sorry to all users who lost funds from the attack. Please use offline wallets as online wallets are meant for new users who aren’t using them as storage of coins. Offline wallets are more safe and secure than any online wallet due to possible attacks that can originate from anyone, anywhere,” Dogewallet posted on Reddit.