SPECIAL WALLET ADDRESS GENERATOR PROTOCOL FOR EXCHANGES

[Bgbolahan]

During last month we heard a series of news about exchange hacking from binance to cryptopia(which led to the shut down of this exchange). This thread is open to discuss about how exchange hacking can been prevented or minimize with the aid of Blockchain.

My first suggestion is that there should be a special protocol for generation of wallet addresses used by exchanges. This addresses should have an attributes and methods of preventing hackers from moving fund. Each mining node should act as police that will always check for malicious attack on these address by blocking movement of large amount of BTC from any address own by exchange  and verification should be done before such move.

[OmegaStarScream]

Or, we can teach and educate people on the importance of being their own bank and having full control over their private keys.

If people traded and withdrawn their funds instantly (most of us at least, not everyone is a daytrader) instead of keeping them on the platforms as If it was their own personal wallets, the losses would've been much less.

[Ailmand]

Or, we can teach and educate people on the importance of being their own bank and having full control over their private keys.

If people traded and withdrawn their funds instantly (most of us at least, not everyone is a daytrader) instead of keeping them on the platforms as If it was their own personal wallets, the losses would've been much less.

I agree with you. People should know how to protect their private keys and must know how to value the privacy of their wallets. However, in some cases, despite how people protect their wallets, hacking incidents still occurring in exchanges as what happened to Binance and Cryptopia. I guess that generator protocol would be a great idea to prevent hackers from moving our funds to their addresses.

[hatshepsut93]

During last month we heard a series of news about exchange hacking from binance to cryptopia(which led to the shut down of this exchange). This thread is open to discuss about how exchange hacking can been prevented or minimize with the aid of Blockchain.

My first suggestion is that there should be a special protocol for generation of wallet addresses used by exchanges. This addresses should have an attributes and methods of preventing hackers from moving fund. Each mining node should act as police that will always check for malicious attack on these address by blocking movement of large amount of BTC from any address own by exchange  and verification should be done before such move.

First, it sounds like you are proposing to change the protocol to help exchanges to deal with hackers - this is not going to happen, in Bitcoin everyone is equal, billionaires and people who click on faucets, exchanges and private users, all transactions are the same, and devs would never do such thing like introducing special rules for some users.

Next, exchanges can already try to contact the miners and pre-establish some safeguards, like saying that some addresses belong to them and asking the miners to not include big transactions without additional verfification - but this is hard on practice, because you'd have to work with all miners of the network, otherwise it won't work and someone will mine hacker's transactions.

[odolvlobo]

During last month we heard a series of news about exchange hacking from binance to cryptopia(which led to the shut down of this exchange). This thread is open to discuss about how exchange hacking can been prevented or minimize with the aid of Blockchain.

My first suggestion is that there should be a special protocol for generation of wallet addresses used by exchanges. This addresses should have an attributes and methods of preventing hackers from moving fund. Each mining node should act as police that will always check for malicious attack on these address by blocking movement of large amount of BTC from any address own by exchange  and verification should be done before such move.

Perhaps the easiest "special protocol" might be to simply use 2-of-2 multisig addresses. Attackers would have to find two keys instead of just one in order to steal coins from the wallets. On the other hand, I don't think that will really stop them because they probably don't find the keys to access the coins in the first place.

I don't think your idea of miners acting as police is feasible, or even desirable.

[pooya87]

During last month we heard a series of news about exchange hacking ~

this is not new! it has been happening ever since first exchange opened up. and for the past couple of years we have at least half a dozen major exchange hacks some of which lead to that exchange closing down.

This thread is open to discuss about how exchange hacking can been prevented or minimize with the aid of Blockchain.

the two aren't related. centralized services can do whatever they want. the usage of "blockchain" will remain the same whether or not exchange are safe.

My first suggestion is that there should be a special protocol for generation of wallet addresses used by exchanges. This addresses should have an attributes and methods of preventing hackers from moving fund. Each mining node should act as police that will always check for malicious attack on these address by blocking movement of large amount of BTC from any address own by exchange  and verification should be done before such move.

that would introduce restrictions at protocol level and will cause more damage to the whole system rather than helping anything. this is also on the end of nullifying the censorship resistance attribute of bitcoin. not to mention that what you call "verification" is impossible because the verification is the signatures that exist in each transaction which indicate the spender owns the keys, any other additional "verification" would require the same cryptography technique and keys which can also be stolen the same way the first one was stolen/hacked.

[Genemind]

I think that would bring more complications and risks in the market. It's something that would need further studies and there are things that should be considered.
Even miners couldn't track or hold hacker's transactions so the responsibility of handling transactions still depends on users.

[Astvile]

Well then if you propose this then you are proposing to change how the blockchain works,this proposal will take a huge human resource for sure and alot of study.Even if experimental network will be made to test this this will take so much time to be done.