πŸ€– The Need for a Secure Cyberspace in the Cryptocurrency Era (Series: Part 2) 😭

in cryptocurrency β€’Β  7 years agoΒ  (edited)

Let’s look further into the past and discuss the lessons learned in cryptocurrencies.

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Bitfinex was hacked in August of 2016 causing the price to fall. The Bitfinex data hack was responsible for the loss of 65 million dollars worth of Bitcoin. As a result, the price of bitcoin fell by as much as 20% to $400 down from a high of $613 that week. Prices climbed back to $550 as of that Wednesday. The said hack is one of the largest steps in bitcoin’s long troubled history. In 2014 investor confidence and bitcoin was dented by a large security breach at Japanese exchange Mt. Gox, which collapsed after hackers stole about 850,000 Bitcoins, at the time, worth $415M About 200,000 Bitcoins were later recovered.

The Mt. Gox exchange hack is the most notorious Bitcoin hack of all time and was the first cryptocurrency hack to gather attention from the mainstream media. Japan-based Bitcoin exchange Mt. Gox had been operating since 2010 for just over a year at the time of the hack and was the biggest Bitcoin exchange in the world at the time.

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Hacking and theft are the two biggest issues that may prevent the digital currency from gaining more widespread use. In 2017, CoinDash Suffered a Hacking Attack and $7 million worth Ethereum was stolen. Cryptocurrency hacked and lost amount to an estimated 60 million dollars worth of currency. Securing bitcoin platforms has been difficult. Bitfinex confirmed that over 119,000 Bitcoins were stolen. The exchange halted trading as well as deposits and withdrawals. The company worked with law enforcement and analytics companies to try to track down the stolen coins and get the platform back online. Bitfinex, founded in 2013, was then the fifth largest bitcoin exchange and the largest outside of mainland China.

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Cryptocurrency, if not held securely, is extremely easy to abscond with. Cryptocurrency is stored in wallets, which are controlled by a β€œprivate key” that should be known only to the owner of the currency. There are many different types of wallets, the most secure of which is β€œcold wallet”, which is stored offline without an internet connection. Source
Many exchanges host all of the customers’ needs including holding their private keys. As a result, these β€œhosted wallets” became easy targets for hackers as well. That’s why the resulting losses were enormous. - Millions of dollars worth of Bitcoin was stolen in various attacks since bitcoin became popular. Trying to retrieve even a fraction of the lost coins requires expert programmers with analytical skills and is very costly, let alone bringing the thieves to justice.

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According to Autonomous Research, all throughout the history of cryptocurrencies, hackers have taken away bitcoins and Ethereum worth about $1.2 billion or about 14% of all stocks existing today. Lex Sokolin, Autonomous Researches director for financial strategy noted that cryptocurrency theft "turned into an industry with a profit of about $200 million per year."
In other news, WinterGreen Research reports that hacker attacks on cryptocurrencies caused losses to private institutions and governments in the amount of $ 11.3 billion worth of lost taxes and profits from legal transactions. Meanwhile, in the quest to block new attempts by hackers, the market for security software, services, and hardware solutions to protect Blockchains may grow from $259 million in 2017 to $355 billion in the years to come.

We are in this era of astonishingly advanced communication technologies and transportation networks but our money system lags a little bit behind. We have a lot of pain points where there are maybe inefficiencies and excessive strangulating fees. For example, we can now talk live to somebody in Mongolia over video chat but if you want to send them 20 dollars, it might take a week using traditional methods. Though we hardly ever send physical money across the ocean nowadays, bank transfers still take a while due to a lot of regulations. That’s another reason for having to pay hefty fees. Remittance companies might take up 25% of that a huge portion of our economic activity. Credit card companies and wire transfers are still being used in the present because they're the best way that we can connect our assets to this big thing we call the internet.

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More Advantages

An online system of sending and receiving money like cryptocurrencies could help distribute donations for free so it will reach the disaster zone faster. It could prevent currency manipulation by corrupt governments as well in theory. It could have all kinds of positive effects including maybe make it easier to buy a coke with your phone. The problem with this idea, of course, is that as soon as the ledgers were put on the internet, they would be instantly targeted by a legion of hackers. We have already seen DDOS attacks, phishing, spyware, etc., all targeted directly at peoples’ precious bank accounts. Without any sort of protection, within days, if not weeks, the entire money supply of the world would be divided into all the hackers and their groups/supporters.

The same technology that was able to spread very quickly around the world is actually not a terribly secure technology and certainly not a very reliable one in this respect. - These are the obvious reasons why we need improved security in the cryptocurrency era.

Please upvote, resteem and follow me, thank you.

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One of greatest blog I've read so far.. Keep it up @hiroyagishi

Β  Β· Β 7 years agoΒ 

Cảm Ƒn bẑn vì thông tin hữu ích

Wow this is a really good post keep it up!,,, thank u!!!

Great article really informative and helpful thank you very much I really searching such information .followed .

Β  Β· Β 7 years agoΒ 

Hey, I'm doing "Operation Translation" by @papa-pepper, and I'd like to translate this post to Chinese. Would you be up for letting me do it? This is just such a great post and I think more people should read it! I would follow @papa-pepper's guidelines, including a link to your post and crediting you in the title.

You got a 17.49% upvote from @postpromoter courtesy of @hiroyamagishi! Want to promote your posts too? Check out the Steem Bot Tracker website for more info. If you would like to support development of @postpromoter and the bot tracker please vote for @yabapmatt for witness!

Β  Β· Β 7 years agoΒ 

Bitcoin!!! like a truck without a brake. :( :( :( ... @propofol

I’ve seen very good drivers drive vehicles to safety even without a break. I think it just needs a lot of know how. 😊✌🏼

lol at this response, nice!

Β  Β· Β 7 years agoΒ 

I agree with you except for one thing--the money grubbing aspect has ALWAYS been there. Go back and read bitcointalk in 2011 or 2012--a lot of threads there were about scams and about how bitcoin was going to make people rich. The difference is that now there is a lot more media attention, but the get-rich-quick and scammy aspect of bitcoin has been there for a LONG time. @hiroyamagishi

Β  Β· Β 7 years agoΒ (edited)

That's a good point. It's evident that even hackers knew the potential of cryptos and they've exploited their money-making potential ever since.

Β  Β· Β 7 years agoΒ 

This post has received a 34.37 % upvote from @booster thanks to: @hiroyamagishi.

Β  Β· Β 7 years agoΒ 

41.32% @pushup from @hiroyamagishi

Since it is connected to the Internet, it is impossible to avoid attacks by hackers. Security measures are urgent issues of Cryptocurrency.

That's a good point. Although it's possible to keep your funds in a cold or hard wallet, very few people know how or even bother to do that.

This post has received gratitude of 5.57 % from @appreciator thanks to: @hiroyamagishi.

Β  Β· Β 7 years agoΒ 

|hackers or bad people are all the way getting earning of others, because they are so called the stint of the world.they are not working for themselves. they live as a theft.

Β  Β· Β 7 years agoΒ 

decentralized exchanges solve a part of this problem

Β  Β· Β 7 years agoΒ 

Thank you for useful information. If I have not invested yet, I will invest in time

You're welcome. I wish you the best of luck.

Β  Β· Β 7 years agoΒ 

I wish my country could grow up into crytocurrency world.. We got a corrupt government and with cryptocurrency they cant take all the control they do actually . I completely agree with you, the cryptocurrency's sexurity must get improved

The way bitcoin attacked points that it wasn't wearing clothes :/
Like a woman with fewer clothes has a chance to get attacked by bad boys.
When talk about bitcoin These bad boys are hacker and hacking should be prevented future lose.
Thanks for sharing knowledge.
God bless you and keep growing.

Β  Β· Β 7 years agoΒ (edited)

That's a very good analogy. I like it! Thank you for the comment.

your welcome brother :)
God Bless you :)

Thank you for sharing your insight! I just started in the end of 2017 to enter the crypto world but I spent already hundreds of hours reading so much about it!

I think your Post is for a big group of people very helpful!
Thx for making this Website for us!
Upvote when your in my opinion @alokkamboj

Β  Β· Β 7 years agoΒ 

Excellent and detailed. Them steem article writers ought to learn a thing or two from this guy.

Your blog is realy helping people trading with cryptocurrencies! Thank you and keep it up!

It’s crazy to think that in an instant some one can take all your crypto like that if it’s not protected properly

nice post ! no site is safe . that's why i prefer to use hardwallets nowadays...

Upvoted and followed! Thanks for the information.

Coinbase tried to charge me $10 to withdraw $25. So I believe the stats, Thank god for gdax

Hey i have just joined steemit and read alot posts on it about cryptocurrencies but truly your post is one of the well explained and quality post. Enjoyed reading your post . Thank you .

Well put...

Β  Β· Β 7 years agoΒ 

Very awesome..
I Agree that we are in need of more security..