Risks Of Bitcoin Losses And Hacks Is Very Authentic
According to a study, one-third of all the bitcoin exchanges has been hacked. Virtual currency amounting $70 million has been stolen by the hackers when they penetrate a secure authentication system at the Bitfinex, a bitcoin exchange.
In 2014, the second largest theft took place at the Tokyo’s MtGox in which the hackers stole more than $350 million in bitcoins, which is a very rare occurrence in the emerging market of crypto-currencies.
As per new data disclosed to Reuters shows that about one-third of the bitcoin BTC trading platforms has been hacked and half of them get closed in the last six years since they burst on the scene. This increasing risk for the bitcoin holders is affected by the fact that there is no insurance of the depositor to absorb the loss, although the majority of exchanges act like the virtual banks.
Tyler Moore, an assistant professor of cybersecurity at the University of Tulsa states that he is skeptical that there is no silver bullet, which will go to solve the security breach issues. No financial mechanism, cryptocurrency or technology can be saved from the hacks. He will soon publish a new research on the vulnerability of the bitcoin exchanges. His research will be funded by the U.S. Department of Homeland Security. He will partner with the research with the Junos Szurdi, a doctoral student and Nicolas Christin who is an assistant research professor at the Carnegie Mellon University.
The main factor related to the risk posed by the exchanges is whether the customer reimbursed after the losses or closure of bitcoin following a hack. Each of the breach and closure needed to handle differently, but as per Moore states that the risk associated with the loss of funds stored in exchanges is authentic. He also said that the bitcoin needs near perfect security due to its irreversible nature.