BITTHUMB HACK: Are cryptocurrencies safe to use? Is there risk involved?
Hello guys, I hope you are doing great!
Last night the 6th biggest exchange by volume, Bithumb, got hacked. They lost around $30 million. Luckily, they mentioned that they will cover the loss and members wont lose money.
What does this mean to all of us? Are cryptocurrencies safe to use? Is there risk involved?
Look, the whole idea behind cryptocurrencies is decentralization. It means that you are your own bank, you are independent. Most of you think if you are holding coins on exchange that it is safe. It is not! It is risk we all take and we all have to take if we want to trade. If you are not holding private keys, you are not holding coins! That's it! Your keys, your coins!
All exchanges are banks, centralized part of decentralization! If an exchange get hacked it doesnt mean that BTC can be hacked. Bitcoin is a protocol, it is impossible to get hacked because you do not have centralized entity! What are you going to hack? Who is the Satoshi Nakamoto? It is impossible to hack Bitcoin! The only way slow down the mainstream adoption is by hacking centralized entities such as exchanges, cash machines and others.
So, tell your friends, your relatives that are worried about BTC that it is not possible to be hacked! Maybe other cryptocurrencies are able to get hacked because the owner is known and these cryptocurrencies are not so decentralized. Maybe you will say that ETH is centralized but what will happen if Vitalik decides to stop his work on ETH? First the price will drop a lot and then step by step the whole project can disappear easily. When whole project depends on 1 person I do not think it is decentralization. But hundreds if not thousands of developers are working together on BTC and if some of them decide to stop working it wont affect the price because we do not know who is behind and the hacking this system is almost impossible.
So, this is event should be lesson to all of us! If you have to deposit on exchange in order to trade, do not go all in on 1 exchange. Always have something on cold storage (Ledger or any other hardware wallet). If you cant afford $100 to buy them then you are riskling your money and if you lose there is no back.
One more lesson should be that centralized entities are hackable and easy to be corrupted. The solution is decentralization and blockchain technology. It will take time but sooner or later cryptocurrencies will be all around us and it will be our reality! I believe in this and that's why I am working all this and why I am growing my and other peoples BTC! Because I believe!
Read here more about this hack: https://cointelegraph.com/news/world-s-sixth-largest-crypto-exchange-by-trade-volume-bithumb-hacked