Though once synonymous with underground networks and black hat hackers, bitcoin and other cryptocurrencies have gone mainstream over the past two years.In 2017, we saw the skyrocket of bitcoin to an all-time high of close to $20,000 followed by a significant decline the following year.But beyond the ups and downs in the market for the world’s largest cryptocurrency is a much more sinister story revolving around cyber-attacks of the economy’s newest asset class.In 2018, it estimated that as much as $1.7 billion worth of cryptocurrencies were swindled away from investors (likely more) through a variety of means.Whether accomplished through hacking, phishing, or other forms of scamming, it’s clear that the crypto industry is facing a serious dilemma with security.For a technological movement based on decentralization and the advantages it offers for security, the number of breaches occurring is startling.Cryptocurrencies offer users a way to send money without the need for a third party, yet the industry as a whole is dealing with more security vulnerabilities than centralized financial firms doing the same thing. During the same time period, more traditional companies that transfer money and banks have seen nowhere near the same amount of issues with hackers. So, what’s the problem?The Weakness: Crypto Exchange Services
While cryptocurrencies and blockchain technology are decentralized in nature, there are many aspects of the cryptosphere that aren’t. The number one culprit in 2018 was cryptocurrency exchanges. Unlike the underlying technology behind currencies like bitcoin, ether, and Litecoin, cryptocurrency exchanges are centralized in nature and not yet regulated to the same extent that most financial firms are.According to data from CipherTrace’s 2018 cryptocurrency report, $950 million of the total $1.7 billion stolen were from exchanges and infrastructure services. Exchange services are a particular pain point for the industry because they’re one of the easiest ways …

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