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As someone who has suffered a significant loss from the Bitfinex hack, I still prefer technical over regulatory solutions. You should also note that Bitfinex u
by Hermel 10y ago
As someone who has suffered a significant loss from the Bitfinex hack, I still prefer technical over regulatory solutions.
You should also note that Bitfinex used to have a much more secure setup, with most of its Bitcoins being stored in cold, offline storage. However, US regulation required them to use segregated accounts for each user. Under such a requirement, the cold storage variant does not work any more, so they moved to keep everything online so they could physically move the Bitcoins back and forth as they were used for margin loans within Bitfinex. It was too much misguided regulation that made them vulnerable in the first place.
- mhluongo 10y agoI think the CFTC interference is overstated- BitFinex still could have segregated cold wallets for the whales, and I've heard they made the change primarily in response to the last hack. I want the CFTC interference to be the primary issue, though- it certainly fits the narrative and would be a great lesson going forward. Note: I also lost money on the hack.
- Animats 10y agoOffline combined storage is not a more secure setup if the problem is insider theft. Mt. Gox had offline storage controlled by Mark Karpeles. Given how hard it is to find the principals of this company, this looks like an inside job.
- aminorex 10y agoGiven that I am ignorant, it looks like a conspiracy.
- rnbrady 10y agoSurely cold storage is compatible with segregated accounts using payment channels or one of the other novel Bitcoin mechanisms. But if not, and cold-storage had to be abandoned, then that would have been a good signal to walk away. And if accounts had to be segregated then losses should have been segregated too, not socialised.