Mt. Gox and Bitcoin Exchanges: Did You Know?

[cryptosec.info]

Did You Know?

Mt. Gox, one of the first Bitcoin exchanges, was once a leading Bitcoin exchange that apparently handled 70% of all bitcoin transactions, remained one of the most trusted and reputable exchanges for 4 solid years.

-until they got hacked at 2014, with approximately 850,000 bitcoin stolen, leaving their customers with empty *bitcoin* pockets.

If you think current big exchanges such as Binance and Coinbase are "unhackable", you might want to rethink this out.

Not Your Keys, Not Your Coins.

[DatKing]

I don't think people have the idea that the biggest exchanges are unhackable. Because with the current technology, it is impossible to prevent hacks at 100 percent rate and maybe it will be like this in the future too. Besides, we also saw that one of the biggest crypto exchanges, KuCoin got hacked some time ago.

[mk4]

I don't think people have the idea that the biggest exchanges are unhackable.

Oh man, you don't underestimate how clueless a lot of people are. Even here on Bitcointalk, I'm still seeing a good number of people using exchanges like Binance because it's "SAFU" *shudders*. And don't even get me started with people on social media sites.

[mk4]

And technology illiterate, they usually assume technology is very safe.

Pretty much, and I don't really blame them. People just have been so accustomed to having intermediaries and having central entities holding their hand and helping them when they mess up that now people in general are having trouble grasping the concept of trustlessness and decentralization. Like when people ask me about Bitcoin and I tell them that no one controls it, like 80% of the time they're skeptical if I'm telling the truth. Having a decentralized asset is just so foreign to them.

[DaveF]

There is a difference between safe and safe enough and there another difference between save enough + regulated and insured.
Do I think Coinbase / Gemini are unhackable? Not at all, but I do think that since they are US based regulated businesses one of which is trying to get listed on a stock exchange that they have done a lot more work on their systems. And if the security fails they have insurance to cover losses.

Looking at places like Binance and other large exchanges, are they secure not as much as those.
Looking at smaller exchanges, not secure at all.

-Dave

[Wind_FURY]

I believe Mark Karpeles should make Mt.Gox live up to its name by being the first NFT exchange/liquidity provider for art work for the cards of Magic The Gathering based card games.

[mk4]

Do I think Coinbase / Gemini are unhackable? Not at all, but I do think that since they are US based regulated businesses one of which is trying to get listed on a stock exchange that they have done a lot more work on their systems. And if the security fails they have insurance to cover losses.

Only hot wallets on Gemini and Coinbase(2%) are insured. There’s no way in hell an insurance firm in the right mind would insure literally every single bitcoin/crypto these exchanges hold. The risk:reward ratio for insurance firms would simply be really bad.

https://help.coinbase.com/en/coinbase/other-topics/legal-policies/how-is-coinbase-insured
https://support.gemini.com/hc/en-us/articles/205823016-Are-my-funds-insured-

[fiulpro]

Some of this works for people who apparently are not holding such a high amount of coins and therefore they do not care much and want to do instant buying/selling and when we talk about the exchanges some of the wallets have actually incorporated the multitasking, holding and trading therefore it is very beneficial. As I remember correctly, Zebpay was an offline wallet and since I did not have much coins I used to use it and after a while they started trading and adding more Altcoins. Now since some years they have started instant buying/selling which is very good since you can incorporate your bank account with them and at the same time it would help you for the long term but then again if I have a good amount of Bitcoins I would not hold them in Zebpay ofc. SINCE MANY PEOPLE USE THESE TRADING PLATFORM FOR HOLDING COINS, WHICH IS REALLY WRONG. Therefore I do think if you have small amount of btc you can use exchanges knowing it's not so secure for sure. But invest in a good wallet if you are trading huge volumes.

[Josefjix]

I don't think people have the idea that the biggest exchanges are unhackable. Because with the current technology, it is impossible to prevent hacks at 100 percent rate and maybe it will be like this in the future too. Besides, we also saw that one of the biggest crypto exchanges, KuCoin got hacked some time ago.

You're clueless of what you're talking about. Wasn't Kucoin hacked last year? There is no exchange that can't be hacked except they don't leave all the coins in their Hot wallet. Don't go out of the forum preaching this to people who hardly know about exchanges and safety precaution measures.

[dkbit98]

Not your keys, not your coins.
Binance was already hacked before, they also had a big leak of private customer information, and it's only a matter of time when Coinbase and other exchanges will get hacked.
Mt.Gox is the famous case of exchange hacks but there are many more of them and I think everyone should check out this timeline of over 50 exchange hacks resulting in loss of $2.1 billion, with latest one being Cryptopia again in February of this year:
https://cryptosec.info/exchange-hacks/

[lifeforcepools]

I don't want to know anything about MT. Gox, for me it's all in the past.

[mk4]

I don't want to know anything about MT. Gox, for me it's all in the past.

"Those who do not learn history are doomed to repeat it." -George Santayana

And I'm pretty damn sure this quote really fits in the topic of those so called "secure" exchanges of the past.

[BrewMaster]

Mt. Gox, one of the first Bitcoin exchanges, was once a leading Bitcoin exchange that apparently handled 70% of all bitcoin transactions,

If you think current big exchanges such as Binance and Coinbase are "unhackable", you might want to rethink this out.

you should have also mentioned that in comparison exchanges like binance or coinbase only handle a very small percentage of the total trading volume. it is about 0.1-0.5% for binance and closer to 10% for coinbase.

people shouldn't trust exchanges with their money but luckily for us the exchanges hacks effects are diminishing.

and the bold part is wrong it is not % of transactions it is % of trading volume.

[ramesh770]

It was long ago known that Exchanges are not safe to keep your crypto currency. Even then if users are doing are doing at their own risk. Most of them are traders who are trading that is why they keep their cryptocurrency in exchanges.

Even the individual wallets and users records are not safe. In this digital world all digital works are hackable. So nothing is safe word in any manners. It is upto you how safe you are being to handle this and keep your self safe from being hacked.

[Zilon]

Did You Know?

-until they got hacked at 2014, with approximately 850,000 bitcoin stolen, leaving their customers with empty *bitcoin* pockets.

This must have experienced the first set back bitcoin had by investors. Loosing 850000 bitcoin in a single hack would ordinarily cause a discouragement to investors. I believe Binance, coinbase , remintano and other exchanges should build a stronger database to avoid hackers from looting and rendering peoples treasury.

[seoincorporation]

That was in all the news, and was a shock for all the bitcoin users, a lot of them lose a big amount of money... But did you know the bitcoins have been already traced?

There are some nice articles talking about where does bitcoin goes after the theft, I will leave the source for those who want to learn more about the topic.

https://blog.wizsec.jp/2017/07/breaking-open-mtgox-1.html

[bitbollo]

I was already following bitcoin when MT.gox was around here.
But there is a detail that most have forgotten or not aware... since this exchange was also famous for higher value of BTC. A lot of people was selling there their coins because there was a sort of premium.
But withdrawal have been always processed in a late way, a good reason to avoid since was a clear "bad sign" and probably a symptom of the upcoming crash.

[Heisenberg_Hunter]

Another funnier thing with Mt.Gox (the so called most trusted exchange at one point of time) was that Mark Karpelès even offered OTP cards and Yubikeys to increase the security of the customers while logging into the exchange. Today we have more and more exchanges functioning on a larger scale and I believe even if there are hacks they would never be as huge as Mt.Gox. Today, not just the leaks of cold wallet private keys pose a danger to the investors but recent leaks like Ledger database hack was indeed a painful one.

I was a victim of Cryptopia hack and I think I lost some ~$500 in the hack back in 2019 and currently following up with the updates from the liquidation team. I was a still a newbie back then and held most of my coins in various exchanges. Right after facing some losses, I started moving coins from exchange as soon as I make a trade and I am continuing that even till today 

[tarzan2]

By this argument every major tech company should have been hacked by now but somehow they are doing just fine. Just because the person running Mt.Gox was a rube doesn't mean being hacked is inevitable. I have kept hundreds of bitcoins on addresses with unencrypted private keys stored in email/txt files on the cloud for years and the only times I've had bitcoin stolen was when I handed it right over.

[AllGoodNamesAreTaken]

Been there...