Best of the Week
Most Popular
1. Ray Dalio: This Debt Cycle Will End Soon - John_Mauldin
2.Stock Market Dow Plunge Following Fake US - China Trade War Truce - Nadeem_Walayat
3.UK House Prices 2019 No Deal BrExit 30% Crash Warning! - Nadeem_Walayat
4.What the Oil Short-sellers and OPEC Don’t Know about Peak Shale - Andrew_Butter
5.Stock Market Crashed While the Yield Curve Inverted - Troy_Bombardia
6.More Late-cycle Signs for the Stock Market and What’s Next - Troy_Bombardia
7.US Economy Will Deteriorate Over Next Half Year. What this Means for Stocks - Troy_Bombardia
8.TICK TOCK, Counting Down to the Next Recession - James_Quinn
9.How Theresa May Put Britain on the Path Towards BrExit Civil War - Nadeem_Walayat
10.This Is the End of Trump’s Economic Sugar High - Patrick_Watson
Last 7 days
Gold Stocks Triple Breakout - 15th Dec 18
The stock market fails to rally each day. What’s next for stocks - 14th Dec 18
How Low Could the S&P 500 Go? - 14th Dec 18
An Industrial to Stock Trade: Is Boeing a BUY Here? - 14th Dec 18
Will the Arrest of Huawei Executive Derail Trade War Truce? - 14th Dec 18
Trump vs the Fed: Who Wins? - 13th Dec 18
Expect Gold & Silver to Pullback Before the Next Move Higher - 13th Dec 18
Dollar Index Trends, USDJPY Setting Up - 13th Dec 18
While The Stocks Bulls Fiddle With The 'Fundamentals,' Rome Burns - 13th Dec 18
The Historic Role of Silver - 13th Dec 18
Natural Gas Price Setup for a Big Move Lower - 13th Dec 18
How to Get 20% Off Morrisons Weekly Supermarket Shopping - 13th Dec 18
Gold Price Analysis: Closer To A Significant Monetary Event - 13th Dec 18
Where is the Stock Market Santa Claus Rally? - 12th Dec 18
Politics and Economics in Times of Crisis - 12th Dec 18
Owning Precious Metals in an IRA - 12th Dec 18
Ways to Improve the Value of Your Home - 12th Dec 18
Theresa May No Confidence Vote, Next Tory Leader Betting Market Analysis and Forecasts - 12th Dec 18
Gold & Global Financial Crisis Redux - 12th Dec 18
Wow Your Neighbours With the Best Christmas Projector Lights for Holidays 2018! - 12th Dec 18
Stock Market Topping Formation as Risks Rise Around the World - 11th Dec 18
The Amazing Story of Gold to Gold Stocks Ratios - 11th Dec 18
Stock Market Medium term Bullish, But Long Term Risk:Reward is Bearish - 11th Dec 18
Is a Deleveraging Event about to Unfold in the Stock Market? - 11th Dec 18
Making Money through Property Investment - 11th Dec 18
Brexit: What Will it Mean for Exchange Rates? - 11th Dec 18
United States Facing Climate Change Severe Water Stress - 10th Dec 18
Waiting for Gold Price to Erupt - 10th Dec 18
Stock Market Key Support Being Re-Tested - 10th Dec 18
May BrExit Deal Tory MP Votes Forecast, Betting Market Analysis - 10th Dec 18
Listen to What Gold is Telling You - 10th Dec 18
The Stock Market’s Long Term Outlook is Changing - 10th Dec 18
Palladium Shortages Expose Broken Futures Markets for Precious Metals - 9th Dec 18
Is an Inverted Yield Curve Bullish for Gold? - 9th Dec 18
Rising US Home Prices and Falling Sales - 8th Dec 18
Choosing Who the Autonomous Car Should Kill - 8th Dec 18
Stocks Selloff Boosting Gold - 8th Dec 18

Market Oracle FREE Newsletter

How You Could Make £2,850 Per Month

Robust Crypto Exchanges Needed In The Wake Of Hacking Incidences

Currencies / BlockChain Jul 26, 2018 - 08:29 PM GMT

By: Andrew_Cioffi

Currencies

2018 has not been a great year for security in the crypto market. In fact, it has been one of the worst years for cryptocurrency holders. This year, huge successful hacking attempts have led to massive crypto losses. 2018 has seen the record of most losses increase and the year has not even ended. The successful attack on NEM led to the theft of tokens worth over $500 million. In total, over $1.7 billion USD have been lost to scams, hacks and other forms of theft. The obvious question being asked by users now is whether a decentralized system will ever be viable. Prospects for exploring the area of decentralized exchange platforms have also been explored. In 2018, the quest to mend security flaws in the crypto trading world is on.




The Inherent Challenges of Trading IOUs

Cryptocurrency trading is praised for its decentralized trading system which allows for a shared ledger. While this is indeed remarkable, the drawback is that the exchanges themselves where transactions take place are centralized. They, therefore, oversee issues like security and marketplace issues. 

The security of the exchanges is thus compromised even though the blockchain itself is secure. A simple modification of records by hackers is the only thing needed for the successful theft of assets. The fact that traders trade IOUs instead of actual cryptos also does not help. It is for some of these reasons that organizations like the OAX FOundation have come up to support the establishment of decentralized exchanges.

The Dream for Decentralized Trading



Lionello Lunesu, who has been helping firms like OAX Foundation achieve their goals has indicated that distributed wallets would particularly be great for dissuading hackers. He reckons that smart contracts would be much more valuable if they had a decentralized way of authentication. OAX has been keen on providing an alternative of smart contracts authentication where over-reliance on blockchain will be reduced. The organization has been borrowing heavily from traditional securities trading. Bitcoin News haas previously touched on the benefits of securities trading which can be borrowed by the cryptocurrency world.

The Role of Mediators

Like other forms of trading, there will be a need for referees who will act as the link between traders and platforms. A lot of misconduct goes on undetected simply because there are no mediators. The trading of bitcoin is for instance much different than it was several years ago when it was launched. Back then, trading was purely decentralized but as time went, the need for centralization kept coming up.

Even though smart contracts were a huge breakthrough for security, they were also subject to some security challenges. Experts like Terence Tsang from Tidebit reckon that multip[e servers will be needed to reduce the risks presented by centralized exchange platforms. 

The Call for Regulation

Regulation is also always a constant topic in the digital currency realm. Regulation often brings the much-needed oversight and standards in any decentralized market. Since crypto exchanges are not regulated, there is no easy way of dictating standards. Experts have recently been very vocal on the need for regulation. In the wake of recent hacking, regulation as a form of risk control has become a very plausible argument.

By Andrew Cioffi

© 2018 Copyright Andrew Cioffi - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules