Tether Double-spending Scare Highlights Short-comings of Crypto Exchanges

in bitcoin •  10 months ago

Last week, a private Chinese cybersecurity firm, SlowMist, posted on Twitter about a possible double-spend of USDT (US Dollar Tether). SlowMist's post showed a USDT transaction that had been sent to an exchange with incorrect field values.

As concerns began to rise and spread, a reddit user explained that to double-spend an Omni asset like tether, one would also be double-spending bitcoin as well, which makes a double-spend nearly impossible.

The reddit user, dacoinminster, claims to be one of the founders of Omni, which is the company responsible for the development of tether.

Tensions regarding USDT were cooled even further as SlowMist tweeted later to not panic as the issue was actually not with the tether transaction but the exchange platform itself. Furthermore, SlowMist and dacoinminster echoed each other by stating that many exchange databases “do not strictly verify the status of the ‘valid’ parameter.”

The heat of controversy has again shifted to crypto exchanges, who have been on defense all year due to multiple hacks of exchanges all over the world resulting in billions of dollars in stolen funds for exchange users in 2018 alone, and the frequency of these multimillion dollar hacks seem to be increasing.

Possibly the biggest Achilles Heel of the crypto-sphere are the centralized exchanges that dominate it. The trust and control users must give to these exchanges is arguably antithetical to what crypto is supposed to be, and with every hack, people become more unsure, scared, and skeptical of bitcoin, cryptoassets, and blockchain.

The crypto-space needs more options. Individuals and the community should be in more control of and secure in their wealth and finances. Crypto wasn't intended to upgrade institutional banks, it was meant to remove the need for such a thing.


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