Thursday, September 18, 2014

Mt. Gox’s Mark Karpeles: More Attacks on Bitcoin Exchanges Coming

Mark Karpeles, the founder of the collapsed Mt. Gox, told Daily Beast:
At the moment, the worst enemies of bitcoin are the people who love bitcoin. Particularly the pirates and all these sorts of people, who spend their entire time trying to attack the services that are trying to make a bitcoin user friendly, like Mt. Gox, for example. As I am speaking to you, I do not think that it is possible to have a bitcoin exchange service unless you have a team that works 24/7 to detect attacks and maintain security. It requires a budget that not many people have access to. I think we will see another Mt. Gox next year, and the next year. And my opinion is that each time we will see that, the losses will increase. In 2012, you had the collapse of Bitcoinica [after a massive hacking incident]. After that you had Mt. Gox. The next collapse could be even worse. 
In addition to being an instrument that is very traceable by government, Bitcoin has shown technological surprises. Karpeles' warning should not be taken lightly.

Bitcoin is not a libertarian currency and it is not clear how stable it is. And it is not clear what types of hacker attacks may occur against Bitcoin in the future.



  1. Let's be clear: the attacks are against the exchanges not Bitcoin itself. The attack on Mt. Gox was an attack on Mt. Gox security, not the security of the blockchain. Nevertheless, an attack on an exchange weakens the trust in Bitcoin as a vehicle for secure anonymous transactions and this strikes at the properties of Bitcoin to which people impute value apart from its value as a money.

  2. "Bitcoin is not a libertarian currency..."

    I found that statement to be very interesting...

    What makes a currency "libertarian", and how does bitcoin fall short?

  3. Only a fool stores large sums of BTC in any 3rd party exchange outside of the Concensus Algorithm, and that includes Roger Ver, who lost "thousands" of BTC in a raid on Bitcoinica in 2012.

    Day trade large amounts of BTC at your own risk. Take responsibility for your Bitcoin security. Any more than 5 BTC should be kept in a secure location, offline preferrably, or at least within the Concensus Algorithm.