Thursday, August 18, 2016

The Wretched, Endless Cycle of Bitcoin Hacks - Bloomberg

From a cryptocurrency reality check
"“When users choose to store their bitcoin in a custodial wallet or exchange, they are giving the provider control over their bitcoins,” said Peter Smith, chief executive officer of Blockchain, which provides bitcoin wallets to individuals. “As a result, customers are not only subjected to the possibility that they will lose their funds via cybertheft but also that the provider can impose a tax to cover the loss of other clients, as Bitfinex is doing here.”
A more radical solution is to use technology to punish thieves. This summer, hackers siphoned off about $60 million of ethereum, the world’s second most-popular digital currency behind bitcoin. The community reacted by adopting a so-called hard fork, which effectively migrated users to a new version of ethereum in which the theft never occurred. The decision triggered a rebellion from a significant chunk of the community, who argued that nullifying the theft was a violation of ethereum’s free market ethos."
The Wretched, Endless Cycle of Bitcoin Hacks - Bloomberg
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