How could Binance be hacked if crypto is so secure?published at 15:23 GMT
15:23 GMT
Mitchell Labiak
Business reporter
One of the selling points of cryptocurrency is its security.
In short, the thinking is that you can use the blockchain – the cloud technology that underpins cryptocurrency – to create a publicly accessible list of every purchase and sale of cryptocurrency. And that ledger of transactions is impossible for any one person or computer to alter for their own ends.
And yet, here we are reckoning with the fallout from yet another massive crypto hack. So what’s going on?
The short version is that the blockchain wasn’t hacked. Rather, the exchange on which people trade cryptocurrency was hacked.
Because cryptocurrencies like Bitcoin cost so much money, many people choose to buy shares in a Bitcoin – or some other cryptocurrency – via an exchange. When people do this, the actual digital key to the cryptocurrency itself is held by the exchange, which is Binance in this case, on the costumer’s behalf.
Purists would argue this undermines the whole philosophy of crypto as a decentralised currency that no single person can control. However, for those who are just looking to buy crypto in the hope its value will rise, exchanges are a handy shortcut.
That is, of course, until a massive issue like the Binance hack happens.