Online Threats Growing For Bitcoin Exchanges

Threats Bitcoin Exchanges

Earlier last month, a secure authentication system at a bitcoin exchange known as Bitfinex was penetrated by the hackers who stole around $70 million worth of virtual currency.

In early 2014, the hackers took more than $350 million in BTC at the MtGox exchange of Tokyo. As per new data, there is more than one third of the bitcoin trading platforms have been hacked and around half of them have closed due to this.

According to digital currency experts, the security challenge for the bitcoin world not appearing to be let up. Tyler Moore, who is an assistant professor of cyber security at the University of Tulsa says that no cryptocurrency, technology or financial mechanism can be made free from hacks.

According to a report from a nonprofit organization Privacy Rights Clearinghouse, there are 6,000 operational U.S. banks in which only 67 banks have experienced a disclosed data breach between the period of 2009 and 2015. This figure accounts for only 1 percent of the U.S. banks.

Security breaches are much higher among the stock exchanges of the world, which attracts the hackers to earn cash easily. International Organization of Securities Commissions and World Federation of Exchanges released a survey of 46 securities exchanges about three years ago, which states that more than half of them have experienced a cyber attack at some point.

Over the span of the last six years, the rate of closure for bitcoin exchanges has increased up to 48 percent as per Moore’s research. It is not necessary that the hacking force these exchanges to close.

Profit has also become a big problem for the bitcoin exchanges as the majority of them not able to generate the desired volume to keep afloat. The bitcoin exchange can be opened for as low as $100,000 to $ 1 million as per Erik Voorhees, who is the Chief Executive Officer and Founder of the digital currency exchange ShapeShift.

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