Bitcoin exchanges are proving to be particularly vulnerable to cyber theft and many of them do not appear to have the capital reserves to offer compensation to their customers. Ironic though it may seem, seeing as Bitcoin has been for a long time lauded as a secure transaction platform, it appears that nearly a third of the crypto-currency exchanges have suffered hack attacks.
Almost half of the traders who were victims of these hacks were forced to close down as a result. Lacking the kind of safety net traditional banks have, such as cash reserves or depositors’ insurance, Bitcoin exchanges’ only option going forward is prevention through more stringent security. In fact, ‘because of its irreversible nature, bitcoin requires near perfect security’ – and that’s hard to achieve by any measure.