Get email alerts Bitfinex hack shows how bitcoin’s blockchain can be a liability Some say community should find a compromise that allows for the reversal of fraudulent transactions Tuesday’s hack of in nearly 120,000 bitcoins — worth about $68 million — being stolen from customer accounts.Bitcoin’s blockchain is often touted as a revolutionary step forward for network security.But Tuesday’s theft of nearly $68 million of customers’ bitcoins from a Hong-Kong-based exchange demonstrated that the currency is still a big risk.Bitfinex, one of the world’s largest cryptocurrency exchanges, has yet to release any details on how it was hacked.But massive bitcoin BTCUSD, +0.33% security breaches like the one at Bitfinex and the attack that bankrupted Mt.Gox in February 2014 highlight the need for the cryptocurrency community to find a compromise that would allow the so-called blockchain to be more flexible so victims of theft can recover digital currency that has been spirited away by hackers.

The blockchain is the universal record of all bitcoin transactions.Each computer running the bitcoin software keeps a copy of the ledger encoded in its system.And every time a group of transactions are processed by bitcoin’s global network, they must be checked against each computer’s stored copy of the blockchain.This digital ledger is both one of the biggest assets of bitcoin-like currencies and one their biggest liabilities.Because once a piece of information has been added to the blockchain, it can’t be altered, and that makes it difficult to remedy thefts.Tuesday’s hack of Bitfinex resulted in nearly 120,000 bitcoins — currently worth about $68 million — being stolen from customer accounts.Bitfinex hasn’t released any details about how the perpetrators pulled off the hack.The company was breached once before, in May 2015, but after that the platform switched to a new methodology for storing customers’ bitcoins The security flaws that make these hacks possible aren’t inherent; instead, hackers exploit specific security flaws at cryptocurrency exchanges, said Charles Hayter, chief executive officer at CryptoCompare, a company that provides data and analytics about cryptocurrency.

Read: Bitcoin price plummets after exchange loses $65 million to hackers Also read: Bitcoin prices plummet after technical glitches spook investors Check out: Digital currency Ethereum nose-dives after $50 million hack “It’s not bitcoin’s fault.bitcoin pdf francaisIt’s the infrastructure around it,” Hayter said.bitcoin idagThe idea of reversing pilfered digital currency by modifying the blockchain is extremely controversial.litecoin minen mit asicAs recently as July, Ethereum, the world’s second-largest cryptocurrency, split into two separate cryptocurrencies after a group of developers proposed a software update that would roll back a theft of about $50 million in ether tokens in June.bitcoin börse in deutschland

Emin Gun Sirer, a hacker and professor at Cornell University’s Computer Science Department, proposed a compromise that wouldn’t involve altering the blockchain.litecoin hash rate vs difficultyHe, along with two colleagues, designed what he called a bitcoin vault.bitcoin emvThe vault allows users 24 hours to roll back any fraudulent transactions.But using it comes with a catch: Storing coins securely would require users to surrender the ability to spend them quickly.Many members of the bitcoin community remain vehemently against a rollback — an adjustment to the bitcoin software that would undo the fraudulent transactions.After hackers stole more than $50 million ether tokens from a fund set up to help crowdfund projects built on Ethereum’s platform, its creator and a team of developers designed a “hard fork” — that is, a mandatory update to Ethereum’s software — that would essentially void the fraudulent transactions.

A group of digital currency purists refused to update their ethereum software, creating two classes of Ethereum.The original version has been referred to as Ethereum “classic.” It’s unclear if the traditionalists resistant to alterations to the blockchain software will ever adopt the new version of Ethereum, and that battle underscores one of the most nettlesome obstacles for broad adoption of cryptocurrencies.For a better experience on Facebook, update your browser.Everything can be hacked.As much as we want to have clean and secure internet, there is a probability that even the most secured network can be infiltrated and hacked.HACKINGHacking can be done through complicated strings, codes, and other technical whatnot.This is what the movies usually portray about hacking - a super intelligent person goes into a computer, opens a command prompt, enters some codes, and VOILA!Hacking done.Though that is a possibility, flashy ways of hacking are very rare.Most hackers, right now, rely on security holes and leaks where they may be able to enter.

Most of the times, these entry points would prove to be non-threatening.Then there are those hackers who rely on people’s stupidity.Some of these hackers will create websites similar to legit ones and do their best to lead you to that website through phishing and other methods, then retrieves your data once you enter them into the required fields.Others will create programs that log down what you enter and send them to a preset email - these are commonly called as key loggers.ANDROID SYSTEMAndroid is an open-sourced operating system and is open to developers.Android also has an option that will allow users to install .apk files (Android app files) from other sources aside from the Playstore.Android is prone to hacking.BITCOINNow let’s talk about Bitcoin.Bitcoin is one of the most used Cryptocurrency.The currency can only be acquired through Bitcoin mining.Mining requires software installed on computers to do computation, perform tasks, and confirm transactions in the Bitcoin network.

Miners are compensated for the “work” being done.Mining keeps the Bitcoin network running efficiently and at the same time helps keep the network secure.Bitcoin, per se, can be hacked.However ,the system is established to see to it that the currency cannot be compromised.It is safe to say that though Bitcoin can be hacked, the cryptocurrency has proven for the last 8 years since it started that it is secure enough not to be hacked.HOW ABOUT THOSE NEWS ON BITCOIN THEFT AND HACKING?Here is where we need to define hacking and what has been hacked.Let’s illustrate a scenario:You have a ten dollars in your wallet.You put your wallet in box and lock it.Then, you set up a camera to monitor and record anything that will happen to the ten dollars.The next day, you found out that your ten dollar bill was stolen.You reviewed the recording and found that someone forcibly opened the key then took your money.The money was stolen.The means of keeping it was not secured.It is not a problem with the ten dollars but that of the way it was kept.