3 min read 

Technical specialists from MIT found a technical vulnerability in the hashing function of the cryptocurrency named IOTA. The exchange rate of the named coin has unsurprisingly crashed, going from $0.74 to $0.61 in a matter of a few hours. IOTA developers have already released a patch, addressing the known issues.

Vulnerability was deemed responsible for a 15% plunge

According to Neha Narula, Director of the MIT Media Lab’s Digital Currency Initiative (DCI), malefactor with sufficient understanding of blockchain technology could have used the vulnerability to their own advantage by destroying or stealing funds from other users.

“We found that IOTA’s custom hash function Curl is vulnerable to a well-known technique for breaking hash functions called differential cryptanalysis, which we then used to generate practical collisions. We used our technique to produce two payments in IOTA (they call them “bundles”) which are different, but hash to the same value, and thus have the same signature. Using our techniques, a bad actor could have destroyed users’ funds, or possibly, stolen user funds,” Narula said.

David Sønstebø, founder of the IOTA system, has express his doubt in validity of MIT findings. According to him, real-life attacks have nothing in common with an intrusion, simulated by the technical specialists at Digital Currency Initiative.

The plunge is a part of a bigger downtrend

With the vulnerability is ‘healed’ and no new threats revealed by now, it is safe to assume that the influence of bad news on the exhcaneg rate of IOTA was limited. The general trend, however, which also happens to be negative, is far from over. Since August 18th, when it was priced at $1.09, IOTA lost 40 percent of its value. When last observed, the price action was back in the green, approaching the $0.66 level. More negative news can seriously affect the exchange rate of this coin. IOTA is currently the world’s ninth-largest cryptocurrency with a market capitalization of over $1.8 billion.

Trade now