Posted on October 5, 2018 at 11:49 AM
It seems that bitcoin can only go so long without a significant hack or threat. Despite being billed as a secure currency storage and usage option based on an encrypted and decentralized global network, it frequently finds itself the subject of negative headlines about technological and financial crimes. Most recently, it’s the news of a 6,000-bitcoin heist in Japan.
A headline like “Japanese Bitcoin Hack” can give the impression that there was a hack of the blockchain system or that a given population’s bitcoin was stolen in a specific area. While the end result may have effectively been that, however, this news was specific to a single exchange, which should actually be reassuring for those who traffic in cryptocurrency. Specifically, it was the Japanese crypto exchange Zaif that reported a hack resulting in 6,000 lost bitcoin. The amount lost was apparently equivalent to roughly 6.7 billion yen, making for one of the largest cryptocurrency thefts in recent history, if not ever, and the news comes after another Japanese exchange – Coincheck – lost some $500 million in NEM tokens this past January.
What Does It Mean?
Ultimately this is up to the market to decide. On the one hand, news like this might simply lead fewer people to trust Japanese exchanges. Whether or not this is fair is impossible to say, but with two significant crypto hacks in a single year, it’s conceivable that there is widespread vulnerability of some kind. More broadly speaking, any kind of hacking or theft news like this may also push people back away from cryptocurrency and toward more traditional digital payment processors that deal in ordinary cash. In this regard, PayPal seems to be making a play to expand its reach and combat the crypto trend already. The service is always going to efforts to make their mobile service one of the best on the market, and that includes security and convenience that may specifically appeal to people who are wary of bitcoin. PayPal is just one example, but the more big hacks like this we see, the more people may be driven to put money in processors rather than invest in cryptocurrency.
Will It Happen Again?
In a word, yes – almost definitely. Bitcoin is easily misunderstood when it comes to security. While the cryptocurrency itself is designed to keep user data and currency safe, exchanges are, or at least can be less secure. Any individual exchange can become vulnerable to a hack that can in turn expose people’s cryptocurrency wallet information. Even if we reach a point in the near future at which cryptocurrency is used far more widely, the market will not be invulnerable to hacks. More headlines like these, in Japan or elsewhere, will come in the future.