Following the hack that successfully stole $64 million worth of Bitcoin yesterday from Bitfinex, there are still no answers to the questions on everyone’s minds.
Who was responsible? At this point, it seems there are two possible answers; a collusive effort between BitGo and Bitfinex, the holders of the keys to the multi-signature wallets that have missing funds or a malicious hacker. When will we get an update from Bitfinex on the status of fiat currency holdings? And finally, how will this impact bitcoin in general over the long term?
While bitcoin was designed to be decentralized, Bitfinex is an example of a centralized exchange. This latest hack highlights the risks associated with centralized exchanges, where losing customer’s money due to security breaches has been a recurring issue. For example, the infamous Mt. Gox scandal and BitStamp provide two examples of the unreliability of centralized exchanges. Users on Reddit are now calling on others to withdraw bitcoin from any websites, switching to ‘cold storage’.
Other cryptocurrencies are starting to carve up a larger slice of the industry, with Ethereum Classic recently gaining traction as the third largest cryptocurrency and Ethereum being one of the main