After one of the most influential cryptocurrency exchanges in the world, Hong Kong based Bitfinex, was hacked and clients lost about $70 million, some started to question the safety of blockchain technology itself. Now one of the people entrusted with the security at the compromised trading venue wants you to know he knows the way to protect the ecosystem.
Mike Belshe, CEO and co-founder of Multi-Signature Wallets technology provider BitGo, has published an opinion piece entitled “Believing in Bitcoin” today on the company’s blog. Acknowledging the concerns, he nevertheless dismisses the fear that it may be impossible to ever secure cryptocurrencies and have full faith in the underlying model.
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Belshe says that the the Bitfinex incident is a learning opportunity that can improve the system. But, he warns: “If we continue to have events like this one, we’ll never gain the user confidence sufficient for us to reach critical mass, and Bitcoin will become a footnote in financial history.”
The solution to the problem, Belshe thinks, is to establish a set of standard practices to secure Bitcoin and other cryptocurrencies, for which a group of industry leaders joined together to create the Crypto Currency Certification Consortium (C4) over a year ago. Under it, representatives from major accounting firms Deloitte and PwC as well as BitGo are developing the Crypto Currency Security Standard (CCSS). It is nearing finalization and is meant to include a comprehensive list of factors required to safely store and transact in digital currencies, including the handling of keys and wallets.
Although the investigation of the Bitfinex hack is not yet complete, the BitGo CEO says that from looking at past breaches he believes that the new standards probably could have prevented the hacking. More than that, he thinks that the standards will enable mainstream financial institutions to enter the Bitcoin market.
Belshe also issued this call to action: “It’s time to get serious about standards and ratify the final version of the CCSS. We also need folks like PwC and Deloitte, who are already part of the solution, to help with auditing cryptocurrency companies and help prevent future attacks. When all parties participating in the handling of Bitcoin adhere to the known best security practices, major Bitcoin breaches will become a thing of the past.”