Trojan targeting Bitcoin fake or true?

The latest in cyber attacks is that popular digital decentralized currency Bitcoin is being targeted by a Trojan that steals funds from your Bitcoin wallet. Security firm Symantec warned the Bitcoin users on Friday about a Trojan, following an alleged hack on a Bitcoin user Wallet that cost him bitcoins, or about $500,000.

What Symantec says is that the 'Infostealer.Coinbit' Trojan tries to find your wallet file and then mail it to the attacker. There is also similar code which looks for the file, but uses FTP to transfer it to the attacker's servers. With this file, the user can then use a 'brute-force attack' to break in and steal the user's coins.

It sounds plausible enough. But the Trojan story becomes unreliable when you consider how Bitcoin works.

Bitcoin is an open source virtual currency that avoids central currency issuing authorities, and operates with a distributed database spread across a peer-to-peer (P2P) network. It uses digital signatures and proof-of-work to secure the user's wallet ensuring that Bitcoin cash is spent only by the owner and that same cash isn't spent more than once.

Bitcoin gained popularity owing to its anonymous nature, which made it perfect for online cash transfers where the identities of people involved had to be kept under cover. Though Bitcoin is legal, its use in several illegal businesses had prompted Democratic Senators Charles Schumer of New York and Joe Manchin of West Virginia to ask the US Attorney General to begin cracking down on sites accepting the currency, some of which allegedly sell illegal drugs online.

Owing to the currency's guarded nature, little record will be left in the system to track the transactions made through Bitcoin. Which means Symantec didn't really have any solid evidence to prove that the Trojan stole cash from a user's Bitcoin wallet. You will have to simply believe all the Bitcoin wallet owners if they start claiming that they had been looted by some Trojan.

The Bitcoin user's and network watchers reaction have been varied. Some argue that anonymity costing you hard-earned cash will turn away people from the network. But a significant number of netizens thought that the story is a deliberate attempt to take down the network. Once the network volume diminishes, it will get increasingly difficult to sustain the transactions and the USD-Bitcoin currency exchange market.

Such a large amount transferring would have caused a drop in the value of the Bitcoin, and the system wouldn't have been able to handle such a large transfer, a netizen wrote on a discussion board.

Though speculations rife, there is no solid evidence to prove any of the stories.