in Link Post

Warning Signs About Another Giant Bitcoin Exchange


Since it’s apparently Bitcoin day here at Future Soon, I thought it was worth including this article published by the NYT last week.

It’s definitely worth remembering that cryptocurrency is a far from immune to the corruption and incompetence that exists in the regular financial markets:

The company lost 1,500 Bitcoin, worth around $400,000, to a hacker in 2015. But the most damaging incident happened in August 2016 when a thief got almost 120,000 Bitcoin, worth around $75 million at the time.

The company spread out the losses to all customers — even those who were not holding Bitcoin at the time of the hacking — by forcing customers to take a 36 percent haircut or loss on any money at the exchange.

There isn’t a single trusted third party acting as a potential security hole in Bitcoin. That doesn’t mean there aren’t many, many bad actors vying to become one. Once you lose your bitcoin, it’s gone. There’s no fraud protection baked into this system.