The hacking community present in the bitcoin market is quite active, with numerous breaches happening on a daily basis. While the media doesn’t report on this, hundreds of bitcoin wallets are hacked and stolen every day, due to low security measures. However, in the long run, hundreds of millions of dollars’ worth of bitcoin have been stolen from exchanges and other bitcoin-based companies.
To put things better into perspective, over 130,000 BTC, which are worth around $74 million have been stolen during this year alone. Whenever a heist takes place, investors face severe losses, whereas potential customers are driven away from the bitcoin market. Because of this, it is essential for the community to find a fix that can be implemented into the system, to help protect bitcoin exchanges, other companies dealing with the digital currency and individual users.
At this moment in time, the blockchain network makes it easy for hackers to track the amount of funds present at the disposal of bitcoin exchanges and individuals, thus making numerous bitcoin users appealing targets for hackers. Numerous studies have been carried out to find ways of minimizing the impact of these hacks. A new proposal entitled the Bitcoin Vault has been pushed forward by researchers Ittay Eyal, Malte Moser and Emin Gun Sirer.
The Bitcoin Vault is meant to be a technical change to the bitcoin protocol that would allow users to recover their bitcoin in case their accounts are hacked. The process is quite simple- users who wish to keep their coins safe can set up a new address known as the vault, which is similar to all other addresses, apart from one aspect: consumers cannot spend the bitcoin stored there quickly, and are required to wait for a couple of hours.
With this in mind, in case the address is hacked, the owner of the vault will be allowed to undo the transaction by using the recovery key. Not only this, but upon deciding to initiate a transfer, users will have to wait for a predefined amount of time before the coins become spendable. During this period of time, the recovery key can be used- so, this doesn’t have anything to do with double-spends, or forks. Based on this, as the recovery key can be used once a transfer has been initiated, hackers will be virtually stopped from being able to hack these secure storage addresses.
It’s worth pointing out that to implement this, bitcoin’s core software would have to be updated. Some members of the bitcoin community believe that this would complicate security, and that it still wouldn’t fix the core of the problem.
Based on everything that has been outlined so far, what do you personally think about the Bitcoin Vault idea? Let us know your thoughts in the comment section below.