In 2014, Mt. Gox, one of the largest cryptocurrency exchanges (managing approximately 70% of all transactions in Bitcoin) had been the victim of successful hacking attempts for a period of three years, and Mt. Gox’s customers lost 750,000 Bitcoins. Bitcoin lost over a third of its value when the full extent of the fraud was revealed.
In 2016, Bitfinex, one of the most popular cryptocurrency exchanges in the world was hacked, and 120,000 Bitcoins were stolen, representing a market value (at the time) of nearly $72 million. In 2018, there has been a steady flow of news reports revealing all manners of cryptocurrency fraud and token theft, Coinrail, BitGrail, Coincheck are just a few of the hacks exposed this year.
Clearly, making blockchain as safe and secure as possible is the highest priority. When investing in the computing power necessary to utilize blockchain in an enterprise, it makes sense that companies want to ensure the highest level of security for their most sensitive data. There are a few theories about how to best accomplish this task.
1. Decentralize the blockchain. When the blockchain is spread out over a large network, it becomes more difficult to attack it. However, this theory has not been well-tested.
2. Requiring …