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Why the Bitfinex hack isn’t the downfall of blockchain

On Wednesday, August 3rd,  Bitfinex was involved in a breach in where 119,756 bitcoin had been stolen from users’ accounts. This amounts to about $72 US Mil. Zane Tackett, Director of Community and Product Development for Bitfinex, informed Reuters of the breach. As a result of the breach, Bitcoin’s worth plunged 23 percent to just a bit under $550 per bitcoin. The details of the hack is similar to the 2014 hack of Mt Gox, in which $500 US mil was stolen. Tackett, assured that the breach did not “expose any weakness in the security of the blockchain.” The scandal highlights the risk of keeping cryptocurrency of centralized ledgers and is unique to their exchange. As of now, Bitfinex is unsure if the hack was an inside job or conducted by an outside force.

As a company that is devoted to providing a secure voting system, we feel obligated to comment on the hack as it uses our technology. It is important to note that the bitcoin blockchain has never been hacked, that the hack was conducted on a centralized exchange. This exchange is also by no means the largest, with the breach accounting for just 0.75% of the bitcoin in circulation. Our CTO, Nathan Hourt, commented on the hack by saying, “Indeed, the comments on how this is so bad and scary and this is what’s dangerous about crypto are quite strange… Why is this any more dangerous than any other bookkeeping? This is actually far less dangerous, since now there are cryptographically regulated procedures necessary to carry out changes on the database. A hacker must comply with those procedures, whereas before he was able to do anything he wanted once he hacked into the relevant computer(s).”

Not everyone is convinced that this hack is a legitimate hack either. As the story continues to unfold we will update this post with more information.



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