Digital currencies are not like stacks of hundred dollar bills; they don’t lie around under mattresses nor are they locked away in vaults. All storage for these brave new currencies is in cyberspace and this creates a unique set of pitfalls for people who buy digital money.
Owners of $400K worth of Stellar (XLM) digital currencies found out the hard way. That’s the amount it is being reported was stolen by hackers, possibly through the fault of a hosting provider. The coins were hoisted from Blackwallet.co, a popular storage wallet for digital currencies.
The developer behind Blackwallet.co was quick to inform the vciti9ms of the heist:
“I am sincerely sorry about this and hope that we will get the funds back. I am in talks with my hosting provider to get as much information about the hacker and will see what can be done with it. If you ever entered your key on blackwallet, you may want to move your funds to a new wallet using the stellar account viewer…”
The people who lost money are perhaps shaken up by the theft, but not as much as other traders who rushed to get rid of Stellar (XLM) in the aftermath. The digital currency dropped 23% of its value in the first 48 hours of the discovered hack.
This highlights the fact that the potential threats to digital currencies involve more than just government regulation and real-world uptake; the security element is just as important to watch. This recent event with XLM is not the first and it won’t be the last. Over the last 2 years has been several high profile theft incidents involving digital currencies.
The good news coming out of the hack is that the trading and investing community is unshaken. Digital currency traders are busy looking for the next best opportunities and despite XLM’s little snag, there is every bit the possibility that the currency could see a rebound.
Stellar (XLM) still has the underlying fundamentals to justify some continued attention from investors and traders. The currency sis trading at around $0.45 and has a market cap of around $8B. Volume over the 24 hour period is $364M and total circulating supply is 17B. Total supply is 103B worth of XLM which gives the currency plenty of room to grow in actual circulation of its coins.
The hack will also do something else for XLM; it will bring lots more people to the trading table. At some point there is bound to be the inquiry as to why XLM was hacked. Was it the most vulnerable or does it have some inherent value that is over and above the other digital currencies? The next few weeks will be very telling indeed. Traders will either show the currency the support they showed which drive it to a high of $0.75 recently, or they’ll come to their senses and move to something else. One thing is certain though, Stellar (XLM) will remain in the news for a little while as result of the breach and this could end up delivering some upside for traders.