Payment provider lost more than $1m in Bitcoins after it was attacked two times by hackers, said the owner of the website.

Two attacks for an overall amount of 4100 BTC have made unable to take of users' balances, wrote the owner in a message entitled ":(".

The assailants jeopardized the host account information by compromising e-mail accounts. Compromised e-mail accounts were old and had not been attached to phone numbers, thus it was absolutely simple to reset them. The assailants were able to bypass multi-factor authentication caused by a failure appeared on the host server.

The developer, known within the bitcoin community as TradeFortress, conjointly runs a bitcoin chat room CoinChat and a bitcoin bank known as CoinLenders. Also was stolen a tiny amount of bitcoins belonging to this bank.

TradeFortress ended the article with the following advice: "Please do not store Bitcoins on a device connected to the internet, irrespective of it's your own or a service's."

These hacks were made in late October, more precisely - on 23 and 26 October, however the TradeFortress waited till actual week to inform clients about the incident.

The website is making an attempt to pay back its clients who had more than 1 BTC (at the moment it is worth $330) from its own account and also from the coins they had in "cold storage" – an electronic wallet which was not connected to the net. However it totals just a quite more than 1500 BTC, and this is much less than the lost quantity.

"I know this doesn't mean much, but I'm sorry, and saying that I'm very sad that this happened is an understatement," - mentioned in the message.

TradeFortress, and Australian developer, told the Canberra Times that he will not report this incident to the police due to the "extremely limited actions" they might do because of the complications to trace the cryptocurrency. However this incident has called doubt in the Bitcoin community.

This may be a great example of why we must not trust on-line wallet services, aforementioned colsatre , a Reddit's Bitcoin subforum moderator. He added that users should never again use something that was created by TradeFortress, because it is impossible to trust the individual who wants to remain fully anonymous.

TradeFortress instantly responded to this retort by saying that even though some individuals assume he actually have their money, he doesn't and uses his own bitcoins to pay back users, and still he is receiving impolite messages.

Bitcoin users now are facing a balancing act between security and convenience. It is technically more complicated to store bitcoins offline, as TradeFortress currently recommends. This conjointly makes it more difficult to use them within the world (for instance, if someone wants to buy a drink in Hackney's Pembury Tavern).

And even storing bitcoins offline sometimes will not provide a user guaranty that he won't lose everything. As we know, in June 2011 there was an incident, actually it was major Bitcoin hack, when 25,000 bitcoins were stolen (at that date the value was about $500,000, however now the value has already reached $75m). We would just mention that these bitcoins were stored on the hard drive of a windows computer.