Cryptocurrency community is all but ignoring an existential risk that may radically change the whole cryptocoin ecosystem. Read on to learn more.
There were at least 4 hacks of major cryptocurrency exchanges in the last 6 months. Every time exchanges were hacked, tokens were stolen. There are suggestions, not entirely without merit, that some "hacks" were done by the owners of the exchanges.
Coincheck lost nearly $500 million in January 2018
Youbit lost about 17 percent of total assets in December 2017
Bithumb lost more than $1 Million in June 2017
BitGrail lost $170 million in February 2018
A reasonable assumption is that personal user data at exchanges is protected at most as strongly as private keys, but probably much weaker.
It is only logical to conclude that in most cases where hackers got access to private cryptocurrency keys, they also got access to private user data.
It is also quite probable that there were a number hacks that weren't made public where hackers were not able to penetrate subsystems managing private keys but got access to private data.
See where I'm going?
At some point, database of one the exchanges containing credentials, personally identifiable information, deposit addresses, balances, withdrawal addresses and individual transactions will be leaked and becomes publicly available.
This should not be surprising to anyone. The security track record of most tech companies is abysmal. The following megacorps had their user databases leaked: Adobe, Yahoo, Linkedin, Dropbox, Tumblr, Badoo, Rambler and many others. That we know of.
Learn more about huge number of private user data leaks at haveibeenpwned.com
Let me put in the simplest terms: it is very probable that your privacy WILL be compromised.
In fact I think that nation-state sponsored hacking groups were already able to get access (probably real time) to databases of at least several major exchanges.
The leak of personally identifiable data will be aggravated by chain analysis and correlation techniques[pdf].
The fact that this threat vector is not being heavily discussed either by core teams of most cryptocurrencies nor general cryptocurrency communities is quite perplexing.
A non-exhaustive list of consequences
Fungibility of major cryptocoins is significantly reduced
Non-private cryptocurrencies stop being considered as anonymous/pseudonymous
Usage and prices of cryptocurrencies (Monero, Zcash) that have strong privacy protections soars
DEXes usage and popularity surges
Centralized exchanges usage drops
Some cryptocurrency whales become vulnerable
Major press coverage ( comparable with Panama leaks) of persons of public interest found in the leaked databases
Be prepared and improve your operations security accordingly.
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True
That's why I:
The privacy is a must for every crypto witch aimed to be digital cash.
Whats your favorite privatecoin @ontofractal ?
I wouldn't waste your time on those in the peanutz gallery...
Decentralized exchanges are going to become more and more popular!
Yep, and so far my favourite Decentralized exchange is BitShares DEX.
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How tough is it to use a decentralized exchange?
That depends. Some DEXes have okayish user experience, others, like EtherDelta, can be quite punishing.
What you aren't taking into account is that none of the major exchanges tha got hacked had major KYC (know your customer) standards. As such it is very unlikely that any of them had a sizeable amount of legitimate personal data, so even if you are right, its little to be scared about. Now if this sort of thing happened to Coinbase or Bittrex or another major exchange that keeps up with KYC standards, then we will have something to worry about.
It is indeed a big risk seeing those news about exchanges being hacked and millions are being taken and I also feel the same way that personal information might have been taken to but I also have a feeling that the people behind these hacks might be a group linked to the owner of these exchanges also. You're dealing with huge amount of money and for sure your priority should be its security so for me that doesn't make sense and will only lead to one conclusion though nothing was proven yet that it might have been an inside job.
Still feel kind of cool if you got in early... ice hasn't even thawed out yet lol
If half of you is on fire and the other half is in ice.... your a perfect temperature on average ;p
Really hoping this brings the real silent coins- Monero etc- to the forefront. Feel like they've somewhat undervalued at the moment.
Interesting article! Checkout @cryptobroye for more bitcoin info and analysis. Im sure there's a lot we can learn from each other!
Everything in life has risk, and if you are not a risk taker then both #success and #freedom are things you will never have! Thats why you dont put all your gold in one safe, spread it arround, buy property, start a business keep on creating additional income opportunities that reward you for having them. Because I Love #cryptocurrency I'll use steem and neo as great examples, have a secure trading account and semi secure trading account. Even Banks are not safe anymore! Just make money and enjoy it Because nothing is forever...
Invest in Dogecoin today. Lol
Doge to the Moon on Dmania. I baught at 55 sat and still holding...
Very interesting points @ontofractal. Thanks for sharing! I’m just learning about crypto, and this is really great to counterbalance what I’ve been reading. Cheers!
Very good information, very interesting friend, good graphics, thanks for sharing, if you can support me on my blog with a vote, greetings
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Mahalos for the insightful article. The amount of major hacks in crypto is important in the stability of the platform, and people's confidence in it. While the money stolen is high, the number of compromised accounts pales in comparison to the online, and retail, hacks (ie Target, Equifax, ...). Thus the problem becomes, what do we do when all out PII is out on the Net? Does the world become like the movie The Circle, where nothing is private.
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Wow, very good information
Do you give me leason about this
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Very good picture and your story
Great post! If you want to keep track of BTC holdings and all other holdings and crypto news check out the easiest to use crypto portfolio tracker - https://hubwallet.io
Exchanges are definitely the weak link in privacy. Great write up.
Buen post amigo.
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There are a number of glaring issues that the crypto community is choosing to ignore. I recently wrote an article on the issue of crypto in Africa. Look past the illusion: https://steemit.com/blockchain/@rebeccamqamelo/the-messianic-symbol-gets-real-blockchain-in-africa
Nice logical assessment of a potential future, that we could easily see play out
I 'use' OpenLegdger; but, unfortunately, have not been able to access the exchange due to continuing maintenance issues.
That said, I really like the platform's layout, and expect once it gets its 'sea legs' should be one of the better exchanges for trading. I hope, too, that there will be an increase in trading pairs once it is able to stand up to the weight of new users.
Peace.
Anyone online for any real length of time will have to face hacking. Even in crypto, it's just par for the course. Maybe this will change in the future.
I stick with Poloniex, and it has been good to me
I think Equifax beat them to the punch
Well, this is a great post, but setting off all the paranoia alerts.
We are The Resistance!
You are innocently downvoted by @grumpycat on your fresh post.
We are resisting this.
Check this link,spread the word and join us if you would agree.
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Discord : https://discord.gg/qMWCbWR
FD
Thank you for the thoughtful piece about complacency and I will study this issue to see how I can personally contribute education and motivation to people to protect this new platform.