Bitcoin Exchange Operators to Employ Better Security Measures after the Bitfinex Hack

By Daniel Zo Bitcoin, Bitfinex, Hack

If you've been following recent bitcoin news, then chances are that you are aware of the Bitfinex hack, where more than $60 million worth of bitcoin were stolen.

Regardless of whether these coins are recovered or not, the digital currency has taken a massive plunge, falling over $100 in value. Not only this, but it has also shined some light on the weak security that many bitcoin exchanges from around the world employ. Its negative effects include the possibility of weakening the trust that investors have in the cryptocurrency.

Bitfinex logo

Upon the discovery of the breach, the company posted the following statement: "Today we discovered a security breach that requires us to halt all trading on Bitfinex, as well as halt all digital token deposits to and withdrawals from Bitfinex. We are investigating the breach to determine what happened, but we know that some of our users have had their bitcoin stolen."

To put things better into perspective, this is a major hit to bitcoin, mostly due to the fact that if the world's fifth biggest exchange can be hacked this easily, then what form of protection for users do the others employ?

Before the hack, bitcoin has risen significantly in value, especially after England spoke about its decision to leave the European Union. Once this happened, investors from Britain, but also from other areas of the world piled up to bitcoin and considered it a safe haven, where they can securely store their assets and funds. It is only now that many of them have been reminded of the grim history the digital currency has, especially when it comes down to employing better security measures.

It is also worth pointing out that not long ago, another hacked managed to steal roughly $2 million worth of digital currency from Gatecoin, which is yet another Hong Kong-based bitcoin exchange.

However, investors need to be aware of the fact that with these hacks, and most that happened since bitcoin was officially launched, do not represent breaches in the actual bitcoin network, but rather, into companies that store the digital currency and offer bitcoin-based services. In the highly publicized case of the Mt Gox hack, which shattered the bitcoin price, a similar hack had taken place.

At this moment in time, it is essential for owners of bitcoin exchanges to invest substantial amounts of time and money into enhancing their security, as cyber attacks are becoming more sophisticated as time passes.

Based on everything that has been outlined so far, were you one of the unfortunate Bitfinex users who lost a considerable amount of digital currency? What are your thoughts on the system breach? Let us know your thoughts in the comment section below.