Do most of the cryptocurrency exchanges have the same vulnerability?
10 October 2017 Posted / 17972 Views
While investing in cryptocurrencies, how many times have we thought about losing all of them? Or about the possible ways to lose the cryptocurrency game? Investing in cryptocurrencies is like an adventure. Investors expect to make money quickly, but some hesitate as well. Because making money via cryptocurrencies is a quick task, but also their volatile nature can make us lose all the money.There are so many cryptocurrency exchanges, which are basically the websites, on which crypto money is stored, bought and traded. For cryptocurrencies, they are a vulnerable point which is a soft underbelly. If private keys are kept private then, it can behave like an invisible hedge, which gives a sense of protection to the users.
The cryptocurrency exchanges are merely websites, which can be hacked. Like on any other website, users have USER ID and PASSWORD, for the crypto exchange platforms, we have the private keys. If any website gets hacked, the hacker/attacker can easily get the private keys of the users, and thus cryptocurrencies can be stolen. Cryptocurrencies work on a decentralized platform, which does not come under any government or it is neither supported by any insurance plan. So, we do not have any safety measures to safeguard them from the hackers. In fact, the people running these websites cannot be trusted as well. Since they are cryptocurrencies, nothing much can be done even if any con happens.Bitfinex, one of the largest exchange platforms, was hacked in August 2016, which was one of the biggest heists in the cryptocurrency world.
Security breaching and vulnerabilities lead an investor in a dubious state. A person can go bankrupt if he has invested a large amount in cryptocurrencies. The exchange platforms just pave a way of managing the risks of storing cryptocurrencies, yet making them available to carry on thousands of transactions that are required of a high-volume exchange. Multi-signature can help this problem to resolve a bit, by which there will be more than one private keys to access the cryptocurrencies stored on the exchange platform, but multi-signature only works out when the signers are independent of one and another. Most of the exchanges work in the same manner, but there is a need to introduce a ‘wow’ factor for the security concerns as well because as the investments in cryptocurrencies will rise, the security factor of the exchanges has to be leveled up as well.