How a Hacker Nabbed More Than $600,000 in Dogecoin

Business Insider
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June 18 2014 11:49 AM

How a Hacker Nabbed More Than $600,000 in Dogecoin

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Help! I'm being mined away.

Photo by Koichi Kamoshida/Getty Images

This post first appeared on Business Insider.

Sometimes a hacker does something so brilliant, we can't help but marvel at it. In this case, a hacker figured out how to control certain home networks to mine for a computer currency called Dogecoin, netting over half a million dollars in a matter of months.

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The hacker's exploits were documented by Dell's security team, which points out that the hacker used a competitor's computer storage product to do the dirty work. 

The Dell team traced the likely culprit to a German-speaking person who goes by the code-name of “Folio” on GitHub. (GitHub is a cloud service where developers post and share their software projects.).

Folio used a security flaw in a computer storage product called Synology, Dell says. Synology's computer storage product is easy to set up, so it has become popular with people who store a lot of songs, movies, and other multimedia files on their home networks.

In 2013, a security researcher discovered a flaw with the Synology product that let a hacker find, and ultimately control, these computer storage devices by searching for them on Google. The company fixed the vulnerably and released a patch. But between the time the researcher told the world about the flaw and the company patched it, the hacker named Folio went to work. He discovered vulnerable computer storage boxes and put them to work to “mine” for Dogecoin. 

Dogecoin is a computer currency like Bitcoin and is created by “mining,” which involves getting computers to answer a series of cryptographic questions to unlocks new coins. It takes a lot of computing power to answer these questions. People actually buy specially made computers to do it. Or, if you are smart enough, you can string together a bunch of computers owned by other people and put them to work mining for you.

Folio was able to nab 500 million Dogecoin, equivalent to $620,496, finding most of the coins in January and February right before the patch was released, the researchers discovered. The Dell team thinks this could be the most profitable illegal hacker mining operation of Dogecoin ever discovered.

Julie Bort is the enterprise computing editor at Business Insider. Follow her on Twitter.

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