What could be the consequences of widespread hacks of exchanges, protocols, ...

[Bitcoin.com97]

It's really alarming this period, just few days we were talking about the casino that was hacked, now this one ,what is really happening, is that the security system is not active, although I know this things has been happening before now ,but the rate at which is occurring is just heart breaking ,the hackers are not joking at all, and there target are on the major exchange and it's working for them ,at this point I won't advice anyone to keep their funds in exchange with the way things are going now . crypto space is not longer safe with the look of things .

I was totally surprised on how this thing happened to the largest exchange, if I may say, this is the biggest hacked on exchanges I have ever experienced, imagine shutting down every USDT activities in the Binance over hours ago, seriously this is so disturbing and alarming this time around, alits of people that made or placed withdrawal yesterday were rejected today, and I noticed this since in the morning yesterday as withdrawal took over one hour before receiving it, I was even doubting may be I made or withdraw to a wrong address, well I believe Binance management would definitely work on this to fix everything as usual. It seems to me that,  almost every year things like this normally happens to an exchanges, but this particular one is something else.

It was very shocking to me , because I wasn't expecting it at all,i wasn't expecting it will be binance, I hope they fix it back ,hackers are really out this period, both Casion s , everyone need to work on there security system to avoid all this stories flying around, every week and month ,hackers are been discussed here because of what is happening, but I believe keeping funds in exchange now is not safe ,who knows there next plan , even many here also save in casino which is not good ,this should be lesson for all now ,before it will lead to something else.

[shinratensei_]

Actually, I have a few key questions:
1. Don't you feel that security in the crypto world is already heading toward zero, even without a quantum hack? The reason is a completely careless attitude toward security - from protocols to infrastructure, from hiring staff to "digital hygiene" rules in the workplace!
2. And the most important question - where could this lead?
I can imagine one very bad scenario: a slide toward purely centralized cryptocurrencies, something like stablecoins or CBDCs, since only they generally allow for stolen funds to be frozen and recovered, and a total loss of trust in any decentralized cryptocurrencies and protocols, causing the real crypto world to "hit rock bottom" and the general public to lose interest in "true" cryptocurrencies.

I can smell shift from loosely programming their contract to be more security minded like how NASA coded program in Jet Propulsion Laboratory (JPL), they followed super strict coding standard to make sure there is no mistake, smart contract have adopted this approach but not fully and maybe there'll be no such thing as randomly outsourced smart contract writing anymore in the future. It's quite expensive lesson to figure out that so many important codes living on the blockchain actually half baked mess.

As for your question

1. It feels like it but I think it's more of a shock to a shift into the AI driven world where anybody can find exploit.

2. I don't believe there is complete lost of trust, the people who preferred to use decentralized currency are the people who know the weakness of centralized system.

[Taricoins]

It seems like everyday their is one hack after another, I largely think this uprising is due to the incorporation of AI into hacking and with this recent surge, it feels like their Is a huge hole this smart people are using.

But the OP's question is consequences of widespread hacks, the answer is a better cyber security measures will be implemented and that leak will be plugged

[Sowat]

It seems like everyday their is one hack after another, I largely think this uprising is due to the incorporation of AI into hacking and with this recent surge, it feels like their Is a huge hole this smart people are using.

But the OP's question is consequences of widespread hacks, the answer is a better cyber security measures will be implemented and that leak will be plugged

I agree with you. Because if we look at the present time, then we can definitely see that a lot of unethical activities are taking place due to the use of AI.‌ But even though it was created for good, some people are misusing it. Due to which people can do many activities using AI. AI is creating better intelligence in humans for hacking purposes.So to speak, the use of AI is increasing a lot these days.

[Dreadboost]

The hack pandemic will not end soon. Let's expect another top exchange hack news before the year's end. I'm not praying for bad things to happen; it's just how things are this period. We can't deny the pandemic isn't real.

Well, Binance has released withdrawals and deposits today. My happiness regarding the Binance case is that people with money in Binance still have the same balance in Binance.

[internetional]

I can imagine one very bad scenario: a slide toward purely centralized cryptocurrencies, something like stablecoins or CBDCs, since only they generally allow for stolen funds to be frozen and recovered

You're effectively conflating two different things here: freezing stablecoins and returning them to their previous owners.

It's in Tether's and Circle's interests to freeze addresses holding large amounts of stablecoins. This means that substantial sums can no longer technically be redeemed, so the issuers won't have to pay out the dollars backing those assets.

Returning those funds to their previous owners, however, is far less beneficial to the issuers. That's why we often hear about funds being frozen, but rarely about them actually being returned.

If people are paying attention to this, they're unlikely to choose stablecoins. Quite the opposite.

[GiftedMAN]

The hack pandemic will not end soon. Let's expect another top exchange hack news before the year's end. I'm not praying for bad things to happen; it's just how things are this period. We can't deny the pandemic isn't real.

Well, Binance has released withdrawals and deposits today. My happiness regarding the Binance case is that people with money in Binance still have the same balance in Binance.

The hack will not end but exchanges needs to advance their securities and the people who handles every expect of their software. If the hackers are using AI related tools to attach them then they need to employ good hackers in their companies that will detect a possible attack so that they can secure every aspect of their wallet to avoid them moving funds before getting noticed if they do not employ good hackers then they will keep facing this risk every now and then because the next one will be massive.

While we commend binance for allowing people have access to their money it is important the people who trust exchanges to hold their funds to learn to hold it by themselves instead of keeping it in an exchange, if the unexpected happens which we don't pray for we don't know if binance will be able to function again before thinking about paying people back.

[DrBeer]

1. Don't you feel that security in the crypto world is already heading toward zero, even without a quantum hack?

You just have to be a little bit more paranoid than before, but I don't think the main principles have changed. You shouldn't be storing crypto on exchanges in the first place. We've literally said this a thousand times in this board.

2. And the most important question - where could this lead?

It's a transitioning period where a lot of exploits are happening because the AI is scanning code like Speedy Gonzales, while not enough reviewing and fixing is done respectively on the other side. It can't last forever.

1. For example, for someone like me who doesn't trade, this is an acceptable solution - not to keep my funds on exchanges. But what should traders do?
2. On the one hand, I agree; on the other, it seems debatable. Let me explain my position: exchanges have enormous amounts of capital that they invest in development, infrastructure, and SECURITY. And such large-scale hacks suggest that the security measures were, to put it mildly, mediocre - not commensurate with the scale and responsibility of the exchanges. This is even more evident given the initial information about how these hacks occurred. As an IT specialist, some of the facts described seem to me to stem either from poorly qualified specialists or simply from a primitive approach to security.

[Aanuoluwatofunmi]

Nobody will ever experience hack no matter its kind, well this is mostly taken place by the poor handling over our crypto asset and how we create vulnerability and lose out with privacy, no it seems as if crypto is the only network that recorded scam the most when we also have it with Fiats over the time, the moment we begin to learn how we could secure our assets, then this people we have no means of stealing them again from us.

[BlackHatCoiner]

As an IT specialist, some of the facts described seem to me to stem either from poorly qualified specialists or simply from a primitive approach to security.

Both these could be true. For example, in Blockstream, I think they only spent around ~$1 million on securing the entire Liquid network, that is worth $3+ billion.

But to play the devil's advocate, the AI cataclysm is just making it easier to break into a system than to secure it. The reason is simple; it is enough to break one vulnerability to take into the system, while the people securing the doors need to secure all doors to be sure no door can be broken. Far more difficult to ensure the latter.

[Creeper0]

There is a difference between crypto security and centralized exchange security. I don't think that people's confidence in crypto security will drop to zero because of centralized exchange hacks. It is true that there have been incidents like exchange hacks and wallet hacks in the recent past, but they have not had a major impact on the crypto market. Especially in the Bitcoin market, they have not had a major impact.

Still, self-custody airgapped wallets can be trusted in their security. If we can properly control our self-custody wallets and be aware of security, then we will be able to store our assets safely. But if we are used to centralized services, it is natural that such hacks will affect you.

[boyptc]

Actually, I have a few key questions:
1. Don't you feel that security in the crypto world is already heading toward zero, even without a quantum hack? The reason is a completely careless attitude toward security - from protocols to infrastructure, from hiring staff to "digital hygiene" rules in the workplace!

I don't think so.

If we're going to point out the binance hack, it's a user's mistake and that's solely the fault of the devops engineer.

Individual ways of maintaining our security differs and so, it's not heading zero but it's warning us that we should be more careful. AI, quantum and other technologies that are said that can be a threat to bitcoin's security, the network is not the problem and threatened but user's experience.

2. And the most important question - where could this lead?
I can imagine one very bad scenario: a slide toward purely centralized cryptocurrencies, something like stablecoins or CBDCs, since only they generally allow for stolen funds to be frozen and recovered, and a total loss of trust in any decentralized cryptocurrencies and protocols, causing the real crypto world to "hit rock bottom" and the general public to lose interest in "true" cryptocurrencies.

What do you think?

That is inevitable, the talks about CBDCs are coming and we can't stop that. With or without these hack incidents, I guess that most of these governments are going to execute no matter what happens.