What likely happened with the Bitfinex “hack”
steemit.com
steemit.com
Regardless of outcome, this article is literally a blaming rant which represents speculation as truths.
Edit...decided to rant a bit myself.
I ran in the Bitcoin scene in SF for about a year and a half. As with most human endeavors which involve stored value/trust, Bitcoin suffers from its share of less trustworthy individuals. Throw in the fact most normal people fail to get the fact Bitcoin isn't just money, and you get the perfect setup for high amounts of dissonance when it comes to debating it. This dissonance manifests during highly polarized events, including Mt.Gox, the halving, the hard fork, the DAO, the tragedy of Ethereum, and on and on.
I'm fucking sick of all the drama because of the continued polarization. The likelihood that I'll be able to go to Peet's tomorrow and buy a cup of coffee with my phone's crypto wallet is greatly diminishing as time goes on. The fact I could be doing this today using existing technology in a highly efficient and trustworthy way makes me sad when I see these exchanges failing over and over again, especially when their only value is bridging cryptocurrencies with the highly untrustworthy world of fiat currency. I think there is no real value to the exchanges for the public, other than for the groups of traders who consider themselves in charge of crypto liquidity.
The bridges are the problem because they represent a vector by which hackers can gain access to large amounts of stored value. It matters not who the hackers were - exchange employees or Turkish hackers both deal the same punishment to the ecosystem. Ethereum was the way to fix this, with decentralized exchanges the promise. Maybe that will happen, but I'm not holding my breath.
The world is ripe for a change in the way we do things we need to trust. Government. Buying things. Agreeing in contracts. Deploying software. Accessing software.
As long as we continue to elevate the value of cryptocurrencies based on their weak links to The Market's financial instruments, stuff like this is going to keep happening.
It's time for cryptocurrencies to stand on their own, separate from the world's markets.
I really don't buy that.
We've seen our fair share of malware that exists to break into bitcoin wallets to steal people's cryptocurrency.
The problem isn't the bridges.
The problem is that security is really frickin hard. Mix in the fact that there's a real monetary reward for hacking the system, and it's no great surprise that we see these types of breeches happening over and over.
All the "bridges" do is provide an attractive target.
Bitcoin's approach to this has been to make security the problem of the user. "Air gaps" and "warm/cold wallets" and all that BS. But individual users are not even remotely equipped to deal with this type of complexity. This is why the financial world has moved more and more toward very simple, basic two-factor security (something you have/something you know, e.g. chip-and-pin), while placing all the hard security requirements on the infrastructure itself.
And that's still not stopped hackers from stealing billions by hacking credit card terminals, the underlying networks, and even the banks themselves.
Fundamentally it's a bloody hard problem. And the tooling and education surrounding the use of cryptocurrencies is not up to the challenge. Not even close.