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Can Crypto-Currencies Ever be Safe?

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After hackers stole digital currency assets from South Korean currency exchange Coinrail recently, the question must be asked, can bitcoin and other crypto-currencies be safe? The problems don’t seem to lie in the blockchain technology, but instead in the exchanges that provide servicing to crypto-currency users.

This isn’t the first time an exchange has been hacked, or even the second or third time. So users must take into account the idea that the place housing their crypto-currencies may not be altogether safe. Can you imagine a rash of bank robberies in your town, but without any FDIC insurance? You would be within your rights to head into your local branch and empty your account. The question is, how much risk are crypto-currency traders willing to take on? Will they hang in there, or empty their accounts?

Steven Russolillo reports on the hack at the WSJ:

Coinrail didn’t say how much was stolen in terms of value, but it is possible that more than $40 million worth of alt coins were taken, according to a wallet address that some have said belongs to an attacker.

South Korea is a hotbed for cryptocurrency trading. But Coinrail is small relative to its competitors. Before the attack, Coinrail ranked near the bottom of the 100 biggest cryptocurrency exchanges in the world by trading volume, according to data from coinmarketcap.com.

South Korean regulators have taken a tough stance in trying to tame the cryptocurrency market, which is one of the world’s busiest as measured by trading volume. Exchanges in South Korea have a history of being hit by cyberattacks.

Hacking has been a problem for the cryptocurrency market world-wide in recent years. In January, Japanese exchange Coincheck Inc. was attacked and a small Italian exchange called BitGrail was hit in February. Since 2014, exchange hacks have cost investors at least $1.4 billion, according to an analysis by The Wall Street Journal.

Read more here.

Originally posted on Yoursurvivalguy.com.

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E.J. Smith

Editor-in-Chief
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com.