From PCWorld

Symantec Uncovers Bitcoin-Stealing Trojan

Online digital currency is increasingly the target of pirates and digital thieves.

By Ian Paul, PCWorld Jun 17, 2011 7:30 am

Security firm Symantec is warning that more people may end up like Bitcoin user “Allinvain” and find their Bitcoin digital wallets pilfered by malicious hackers.

Symantec recently discovered a Trojan called Infostealer.Coinbit lurking on the Internet that locates your Bitcoin digital wallet and e-mails its contents to the bad guys. With the information contained in your Bitcoin’s wallet.dat file, online thieves can easily steal your Bitcoins. And considering that, at the time of this writing, you could sell one Bitcoin for $16.39, Bitcoin thieves stand to make a tidy profit from their illegal activities.

Bitcoin (BTC) is an online digital currency traded over a peer-to-peer network. The currency uses a system of private and public keys to verify the authenticity of each transaction and transfer Bitcoin balances between users. Similar to the way e-mail encryption works, as long as someone doesn’t have your private key (usually a long string of letters and numbers) no one can steal your Bitcoins.

The weak point in the system is that your Bitcoin wallet contains your private key. So once someone has your digital wallet, they also have control of your Bitcoins and can easily transfer the digital money from your account to theirs.

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