The value of Bitcoin which is the most widely held as of right now cryptocurrency ran up to almost $20,000 a coin last week before ultimately falling to about $14,000 and change over the weekend, then riding back up. More and more people have gotten involved in buying Bitcoin and in the midst of this, there was a major hack late last week, hackers got away with 70 million dollars at the time of the hack of Bitcoin and of course that value depends on what the value is of each Bitcoin at any given time. At the time, it was about $70 million dollars worth.
From the mining service Nice Hash, this was recordedly a professional attack according to Nice Hash although they haven’t really said much more than that. These incidents are relatively rare, but they’re also not nearly unheard of, there were 31 million dollars stolen from Tether which is another coin recently, an Ethereum code bug lead to a $150 million dollars worth of Ethereum being frozen. Coin Dash had an issue where $7 million dollars was stolen from investors back in July.
It’s complicated to get into the micro of how these security vulnerabilities exist, and the security vulnerabilities are technically different between each case, but the main take away is that this is different than having US dollars in an FDIC insured American bank, there’s no question about that. The big picture is when you hold Bitcoin and other cryptocurrencies on exchanges is that it’s important to understand you don’t really have possession of it, the exchange has possession of it and it sort of assigns that cryptocurrency to your account and there are ways who are interested in this, of really taking possession of your Bitcoin and other cryptocurrencies that are similarly structured by having the private keys in wallets of your own, rather than in exchanges. This is going to be a growing issue and if you needed any indication, cryptocurrency is really splitting a lot of people because there are those who are completely on the side of this is the future of transnational currency transactions and the value of these cryptocurrencies is going to go up indefinitely and it’s a great thing to get into.
The other side is this is totally worthless bubble fodder and this is all going to crash and it’s a pyramid scheme and somebody is going to get left holding the bag. Then there are the few in between which say, “yeah, you know there may be a bubble but at the same time, fiat currency that many governments have are also not really backed by anything of intrinsic value, so that this could become legitimate long term.” There is a sign that these have been becoming somewhat more legitimate, which is that a number of financial exchanges are now adding the price charts and price tracking of sometimes a dozen, sometimes even over 100 cryptocurrencies to their database in addition to stocks, bonds and other mutual funds.
If that is a barometer of perceived legitimacy, it appears that it is growing. Certainly everytime you hear $70 million dollars in Bitcoin was stolen, it does undermine the perceived stability and value of cryptocurrencies every single time there’s a headline like that, for better or for worse. At Coinjolt.com we have the highest standard of security protocols in place so that every dollar and every asset is secured with close to zero chance for a breach in security.