September 12, 2016
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A series of cyber attacks against digital currencies has left the financial services industry wondering whether fresh blockchain technology can be made secure enough from criminals.
From established names such spil UBS and Santander to fresh fintech companies Ripple and R3, many ter the industry are antsy to rip out old systems of moving money and substitute them with quicker and cheaper blockchain technology. Developed spil a technology to underpinning digital currency bitcoin, blockchain permits transactions to be verified electronically overheen a network of computers, with no central ledger.
However, cyber criminals have targeted companies using blockchain and digital currencies, attacking DAO and Bitfinex ter latest months. The DAO wasgoed a zuigeling of crowdsourced venture capital fund that permitted people to make investments using Ether, another digital currency. It had raised overheen $150m ter May, only to have more than 50M drained by cyber criminals te June, cutting the value of the currency by a third. Bitfinex, a Hong Kong-based digital currency exchange, lost about $65m te a cyber attack te August.
Fred Ehrsam, co-founder of Coinbase, a San Francisco-based start-up where merchants and traders can buy and sell digital currency, says blockchain will become more secure with time.
“I think at the beginning you’ll have people who screw up with it. It is true of any fresh technology, people have to get used to it,” he says.
Even before thesis attacks, the Financial Stability Oversight Council, a group of US regulators, warned that because thesis systems, known generically spil distributed ledgers, were fresh, flaws might not become clear until they were “deployed at scale”.
“Like most fresh technologies, distributed ledger systems also pose certain risks and uncertainties which market participant and financial regulators will need to monitor,” the Council said.
One of the most serious problems is that some cryptocurrency companies rely on fresh programming code. It is hard to anticipate what the flaws are ter fresh code or a fresh programming language, spil there has not bot a history of specialists examining it for flaws.
Unprecedented transparency of transactions sits uneasily with financiers