Security risk

[Zilon]

The risk is associated with crypto exchanges and not crypto currencies and I guess this insecurity is caused by lack of cyber security experts who would help secure the database of this exchanges or insufficient finds to pay for their services. Let's hope we get more advanced features in the near future or some new or intending exchange could work on this limitation and build a better network for their clients.

[CryptoYar]

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Does is really mean that the security risk of Cryptocurrencies is higher than that of fiat banks?

after a bank is hacked, its funds can be recovered.
But it is almost impossible to get the tokens/coins once the exchange is hacked and tokens/coins stolen.

But this does not mean that there is a lot of risk in crypto, if your funds are in your personal wallet then you do not need to worry about it...

[Lorence.xD]

The risk is associated with crypto exchanges and not crypto currencies and I guess this insecurity is caused by lack of cyber security experts who would help secure the database of this exchanges or insufficient finds to pay for their services. Let's hope we get more advanced features in the near future or some new or intending exchange could work on this limitation and build a better network for their clients.

It's not just the lacking of cyber security aspect of these exchanges it's also the fact that it's a cat and mouse chase for hackers and cyber security because when one creates an innovation, another one tries to defeat or circumvent the defenses and it will go on and on. That's why many people advice you not to store your coins on exchanges and online wallets since they are vulnerable to attacks anytime of the day.

[isaac_clarke22]

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Does is really mean that the security risk of Cryptocurrencies is higher than that of fiat banks?

It depends on where you hold your crypto coins. If it is an exchange, you're like holding your money inside a bank with the risk of being stolen of course because it is not you private key.
However if you hold your crypto coins in such wallet like Desktop ones or anything where you hold the private key and kept it safe in a written note, it is all yours and nobody could steal it unless you leak it.

[Dread Pirate Roberts]

In the past, in 2012-2016 there were many cases of exchange being hacked. but I think security is now evolving and more secure. but does not guarantee that will never happen again. use the exchange only for asset transfer not as a personal wallet. and the things you mentioned are facts and people should be aware with that.

[DooMAD]

<link removed>

Slightly off-topic, but I'd ask that you don't legitimise that particular website or offer them any additional traffic.  They have effectively declared war on this community and we should make every effort to boycott them.

[SFR10]

But often you will hear that one exchange is hacked or so.
Does is really mean that the security risk of Cryptocurrencies is higher than that of fiat banks?

I believe you meant to compare banks with centralized cryptocurrency exchanges and that's still not a fair comparison... You give your money to one of them to keep it safe while you use the other one mostly for conversions and in some instances to profit.

One is that many banks are not yet fully digital so they are still conducting their business offline

I don't think that's "still" the case in most countries; they've evolved and most likely rely on it to be "fully" operational.

[KingsDen]

How do you imagine a bank being hacked by a bunch of hackers and they move the money from one bank account into another bank account? Bank transfers are transparent and reversible.

Very valid point sir. The banks are centralized and interconnected. Hence, all transactions are monitored. This might be a great challenge for hackers. How about the hackers converting the money to crypto  immediately. Though the process won't be as easy as I said.

[buwaytress]

It's really simple. Most banks anywhere in the world, if it's recognised by the central bank, give you deposit guarantee. And these banks are also insured, or guaranteed by the state. So except in the worst-case scenarios like total money devaluation or economic collapse, yeah, your money's safer in a bank account than it is on a crypto exchange.

How do you imagine a bank being hacked by a bunch of hackers and they move the money from one bank account into another bank account? Bank transfers are transparent and reversible.

If you're the bank, you set the terms. How do you think banks hide and obfusctae the money trails when you can edit, remove, even add entries into accounting? Bank transfers are or can be transparent, but in practice, that's anything but the level of detail that's displayable. Change that detail or remove it, or obscure it.

Ask any bank now to show proof of funds. They won't, because they can't.

[ropyu1978]

The security risk of a state backed world bank can be said to have solid security, if for example we send the money wrong we will most likely be able to get our money back, with the help of the government, but if we make a transaction error in crypto, we all bear it at our own risk . , because transactions in crypto do not involve third parties, but every advantage has its drawbacks, and vice versa...

[sapnu]

Can we compare the rate at which fiat banks go bankrupt and the rate exchangers do?

It's very rare you hear that a bank became insolvent due to robbery attack or hackers.
But often you will hear that one exchange is hacked or so.
Does is really mean that the security risk of Cryptocurrencies is higher than that of fiat banks?

When it comes to security risks, it will more likely rely on their choices in wallet with regards on how trustworthy and how much reputation it has so far. Comparing the security of risk in fiat and in crypto because the regulations are different as well as the security system. Crypto, being considered as a digital currency deals with online security while in fiat, documents and other files physically and it also deals with digital system now that it we're in the digital age already. You should make sure that you always ensure the proper security of your current holding so that it wouldn't get hacked or end up getting wasted for nothing.

[lablab03]

Can we compare the rate at which fiat banks go bankrupt and the rate exchangers do?

It's very rare you hear that a bank became insolvent due to robbery attack or hackers.
But often you will hear that one exchange is hacked or so.
Does is really mean that the security risk of Cryptocurrencies is higher than that of fiat banks?

fiats banks is more safer than crypto currency exchanges,but it's very common problem when it comes hacking some cryptocurrency exchanges, which probably most of the trusted exchanges already knew about that and they all totally safe for hacking,  so if you want to store your money through crypto exchanges must choose trusted one because picking a new exchanges is very risky and you don't know some of them are not really aware in such issue and  lack of consideration for their responsibility when it comes running a exchanges.

[NotATether]

They have more risk since they operate on a decentralized level and they don't exactly have any government backing them so they have a hard time protecting themselves from attacks so all they can do is just to create a much secure site than ever.

You got it all mixed up.

"Government" doesn't protect banks from cyberattacks, it's completely the responsibility of the bank to place proper security measures - using software of third party threat intel companies, because bank software is notoriously old - for their own services and sites at their own expense.

Exchangers do not "operate at a decentralize level". They are centralized because they are controlled by one person or group of people.

Some exchangers having security vulnerabilities does not make cryptocurrencies more high-risk, in the same way that your transportation and ridesharing companies having vulnerabilities doesn't make Uber or Lyft rides more high-risk.