Bitcoin "Total Crypto Breakdown" Highlights Risks To Banks

Bitcoin "Total Crypto Breakdown" Highlights Risks To Banks, Deposits and Digital Wealth

- Bitcoin wallet app Blockchain suffers major security blunder
- Poor tech sees multiple accounts being created using same address
- Security lapses in electronic and digital currencies not uncommon
- Bitcoin and cryptocurrencies in infancy but may become useful tools
- Physical gold offers most secure form of wealth preservation

Blockchain.com, which claims to be the maker of the most popular Bitcoin wallet, suffered at the weekend what the Guardian describes as a "total crypto breakdown", highlighting once again the vulnerability of electronic and digital currencies to human and technological error and or hacking.

Multiple accounts were created using the same bitcoin address which meant that many users apparently had access to the same pool of funds which led to losses for a few.

The newspaper reports that a "series of bad development choices" in the software "all failed in the worst way possible". It was operating in the typical "belt and braces" mode where if one line of defence failed another should still be operational.

"The magnitude of the error sparked shocked reactions from information security professionals."

Security lapses in software for managing digital and electronic currencies are by no means uncommon.

Early last year banking giant JP Morgan was hacked. It had its system hacked and details of 76 million customers were stolen (Cyber Attacks Growing In Frequency – Entire Western Financial System Is Vulnerable). JP Morgan use the "belt and braces" approach of two-factor authentication but in one older overlooked system they were still using a less sophisticated single password system.

In February, we covered the story where Russian cyber-security firm Kaspersky lab uncovered an international hacking group who had managed to tamper with customers accounts in order to steal possibly up to $1 billion from over 100 banks globally (International Hacking Group Steals $300 Million – Global Digital Banking System Not Secure).

ENDS

© Scoop Media