As cryptocurrencies become more and more widely adopted, there are still many parts of the public who are apprehensive about trying it, particularly given how many headlines there has been about exchanges being hacked and client funds being stolen.
At a recent the Vietnam Cryptocurrencies And Digital Assets Dialogue 2018 held on Sept 15 and 16, Huobi’s head of marketing and events Ethan Ng put forward a number of suggestions for industry standards aimed at addressing this. In that speech, Ng called for the exchange industry to collectively do more to protect the public by adopting standard security practices and working with government regulators to create smart regulations that both protect the public and encourage innovation.
In my opinion, security is a grave risk for cryptocurrencies and exchanges. Without trust in the security of a system, adoption will be hindered. It would be ill-conceived to find out you would have lost 850.000 BTC. Of course I’m referring to Mt. Gox[1].It failed to protect the private keys of its wallet where it stored all the customers’ deposits, which hackers would drain into their wallets. There have been similar cases albeit with a less amount of BTC lost.
In today’s money, 850.000 BTC would have been worth 5.722.200.000 dollars. Or what about most recent June, 40,000,000? The list goes on with exchanges that lost its users funds due to security flaws in exchanges.
Thus, measures have to be taken. Security should be maximized.
During the Vietnam cryptocurrencies and digital assets dialogue 2018 event, Ethan Ng, Huobi spokesperson, addressed which measures can be taken to provide better security. There’s other several tips mentioned by the cointelegraph[2]. Huobi is acting to deliver better security. Huobi protects its clients with a 20,000 BTC reserve fund as well as an user protection fund, which is funded by 20% of all HTs bought back by Huobi. Huobi stores 98% of its wallets in cold wallets, rather than hot wallets. Huobi has strong internal controls to prevent fraudulent coins from being listed on exchanges and to separate good projects from bad ones. Huobi has pioneered this space via its SMARTChain evaluation model. Furthermore they’ve implemented mandatory user 2-factor authentication for all their users. Lastly noted was the robust cybersecurity protection they offer[3]. There ought to be an industry standard to ensure client protection.
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