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Bitcoin Security Questionable After $4.1 Million Vanishes

Bitcoin reflection featured

Bitcoin gets a hard rep, especially after its value crashed when numbers fell when Silk Road went down and the FBI took large reserves of the currency.

Well, now it looks as if it’s taken yet another blow due to a Chinese bitcoin exchange going offline, and taking with it $4.1 million in users’ accounts.

Claiming to be based in Hong Kong, but actually revealed to be based in China, it turns out that the btc-gbl.com dealt with a fake address and didn’t obtain any of the usual business licenses needed to operate a financial services company.

So it’s not really surprising that it disappeared offline, like many other bitcoin banks and exchanges tend to. Indeed, the Australian bitcoin bank ‘Tradefortress’ went offline after having lost $1 m in bitcoins that someone had taken. It was later revealed that it was an outfit operated by an 18 year-old boy who lived in an apartment block.

This newest, and rather high-profile theft of bitcoins does – yet again – raise questions around just how reliable, secure and plausible it is to have bitcoins as a payments method.

After all, it seems to operate on a very similar ethos to the internet, especially as more people come in to capitalise upon the pool of wealth sitting on these virtual coins.

Do you think this is the sign of a currency worth endorsing? Or is this just the equivalent of someone robbing a bank in the digital world?

Let us know below.

 

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[Image: antanacoins - Flickr]

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