Binance hack, and what it can mean for Bitcoin's operators.

[mirakal]

Before USDT was born, there were already hacks happening on exchanges and thousands of Bitcoins were lost, and yet the market still survived. If Bitcoin was going to die it should have died during the early stage, so since Bitcoin has already reached this level where even institutional investors are adopting it, I don't think the recent hacks will change how they see Bitcoin. In fact, if you read the news, there are institutional investors still buying at this time, we have Strategy and Strive, both have billions of dollars in Bitcoin holdings.

These days, hacks are no longer new, its already part of the growing system. So whether we like it or not, bitcoin will definitely be prone to hacks and scams, but I don't think the issue is on bitcoin, its clearly how people are dealing with their bitcoin and how they maximize their safety and security.

As for bitcoin, it will continue to grow its adoption and reach new heights no matter how hacks are going rampant. Hacking can't be stop, but we can always avoid them if we stick with those security measures and limit those hacking incidents.

[X-ray]

It kinda the thing that comes with self custody, if anybody ever stolen your cash or gold bar, nobody can freeze it either.

The same exact thing happen with Bitcoin, it's purely self custody and decentralized. You have absolute ownership over it but it strips other party from access and put us as sole controller.

In this case, when we are talking about security and accountability with decentralized cryptocurrency, we are talking about prevention more than cure.

We need to strengthen security and only do legal enforcement by tracking and blocking the hackers at chokepoint as last resort for recovery.

[cryptoaddictchie]

Crypto definitely has to overcome the challenge of security, trust and accountability, not just the issue of adoption.

Hope we don't get to see where the fast growing decentralized system still rely on centralized institutions for protection!

Bitcoin assured the security of its network but what were really need to advocate is the protection for individual not to get swayed by true good to be true offer and promotionals. What happened on Binance is a human error and those error doesnt trimmed down the trust on bitcoin but to other peoples way on how to protect themselves.

1. Self custody - Be vigilant on how you stored your funds dont click links and phising sites.
2. Keep your passphrase safe - Wrench attacks are imminent be ready to secure your assets key.
3. CEX custody - Its not bad to use it as its conveniently given us cool features, just dont trust so much and be cautious.

Well theres plenty of other ways and method. You can search it online or browse here on forum for more contents.

[freedomgo]

Also, this Binance incident has also revealed the usefulness of freezing stolen stablecoins though it's a feature that Bitcoin wasn't primarily designed with. Bitcoin didn't come with such intervention mechanism and that's because one of it's strength is that no central authority gets yo decide which valid transactions should be allowed or not.

That was the positive side of stablecoins, however there is also a negative side because what if our accounts were frozen just because the government wanted to. If I had to choose, I would always choose Bitcoin over stablecoins, but then exchanges are operating as businesses so they have to minimize the risks and using stablecoins is one way to do that.

[Lexandroove]

We all witnessed the development and story of how about $6.43 billion dollars was stolen from Binance. And one can't help but extract s :)ome useful lessons from the incident.

The recent development is that about 44% of the funds which were stolen have been frozen. This was possible because stablecoin users had it in them to intervene. An impressive move, but this same move explains that crypto can be contradicted.

Firstly decentralization. Dentralization is one interesting topic here, we always speak about it. One thing is looking certain, some of the biggest assets in the industry assets will be dependent on central authorities for transactions to be authorized and go through.

Now to Bitcoin, what we saw happen can't happen with Bitcoin. No one can simply contact a Bitcoin issuer to freeze an address because there's no central issuer. Now on the other side, this freedom however makes recovering Bitcoin in the case of theft very difficult.
This is not to talk down Bitcoin, but a gentle reminder that there has to be a separation between the technology of Bitcoin and the other custodian people use to get access.

Crypto definitely has to overcome the challenge of security, trust and accountability, not just the issue of adoption.

Hope we don't get to see where the fast growing decentralized system still rely on centralized institutions for protection!

This highlights the distinction between decentralisation at the protocol level and the centralised services built around it.

Bitcoin has no central issuer that can freeze addresses, which protects its permissionless nature. Protocols like Babylon Labs’ Trustless Vaults for Bitcoin complement its primary layer in negating the need for third-party reliance or tr-party escrows; we shouldn’t forget that this could make funds harder to recover, though.

Stablecoin intervention can help in certain cases, but it introduces another layer of centralised control.
Ultimately, security shouldn't come at the expense of decentralisation, and users need to understand the risks associated with the assets and platforms they rely on.

[Cookdata]

These days, hacks are no longer new, its already part of the growing system. So whether we like it or not, bitcoin will definitely be prone to hacks and scams, but I don't think the issue is on bitcoin, its clearly how people are dealing with their bitcoin and how they maximize their safety and security.

As for bitcoin, it will continue to grow its adoption and reach new heights no matter how hacks are going rampant. Hacking can't be stop, but we can always avoid them if we stick with those security measures and limit those hacking incidents.

Bitcoin is not prone to hack, the storage system is the problem. I can't remember the last time a bug was found in Bitcoin to begin with ever since I knew Bitcoin, maybe before I knew Bitcoin, there were 1 or two incidents, and they were patched immediately to stop the exploitation. Bitcoin method of custody is making some people have a sleepless night, and that is because they have chosen to use a custodial system when they can do it on their own. If you can't be your own custody, perhaps you should just buy ETF instead.

The stablecoins are known to be centralized from the beginning, I believe even the hacker knew about this before moving the stables, but who knows, he didn't expect the contracts to be that fast to freeze the stable. They lent $60M to Aave and received ETH before that. If there was a pool that was going to accept the whole amount without slippage, I'm sure the hacker would have done it quickly before the money was frozen.

[Spaceman1000$]

We all witnessed the development and story of how about $6.43 billion dollars was stolen from Binance. And one can't help but extract s :)ome useful lessons from the incident.

The recent development is that about 44% of the funds which were stolen have been frozen. This was possible because stablecoin users had it in them to intervene. An impressive move, but this same move explains that crypto can be contradicted.

Firstly decentralization. Dentralization is one interesting topic here, we always speak about it. One thing is looking certain, some of the biggest assets in the industry assets will be dependent on central authorities for transactions to be authorized and go through.

Now to Bitcoin, what we saw happen can't happen with Bitcoin. No one can simply contact a Bitcoin issuer to freeze an address because there's no central issuer. Now on the other side, this freedom however makes recovering Bitcoin in the case of theft very difficult.
This is not to talk down Bitcoin, but a gentle reminder that there has to be a separation between the technology of Bitcoin and the other custodian people use to get access.

Crypto definitely has to overcome the challenge of security, trust and accountability, not just the issue of adoption.

Hope we don't get to see where the fast growing decentralized system still rely on centralized institutions for protection!

I pray we don't get to the level of decentralized system depending on centralized system for protection, funny enough what kind of protection will the centralized system offer in any case, is it the protection that comes with compromise, just like the This Binance case case. You've already said it, a decentralized bitcoin asset will not allow hackers to access that level of funds especially when it's multisig.
The good news in this binance case is the fact that 44% of the assets were frozen and recovered, at least not everything was Lost, but this is a far cry and a wake up call for people to go fully decentralized.

[macson]

Yeah, Binance, Bybit and Bitget users have been lucky. We wouldn't say the same for FTX, so everyone should know that the risk is still there putting funds in exchanges.

And luck can't come twice. So if they still have the opportunity to move their assets to self custody, then that is the best option. Exchange as its function is only to exchange, nothing more.

Nevertheless, the days are gone when everyone thought that custody risk is limited to custodial entities. Even self custody has been reasonably demystified with the Coldcard hack, so I would advocate spreading your risks between more than one wallet.

Perhaps more specifically, the issue lies with certain hardware wallets. Self-custody remains a reliable way to secure your assets --- using an air-gapped device and generating your address using a wallet like Electrum could be a better option.

[greysonz]

No matter how much CZ says he's retired and has no connection to Binance, that would be a lie. He's in charge, I'm sure of it. He's certainly done something called "decentralization," but I still can't believe this guy would let go of the reins. What did the Binance hack show us? That huge sums of money can be easily stolen through social engineering. Yes, amazing hacking skills and luck can be used, but the primary element of influence remains the social element.
This trend will continue over time, and by that I mean the trend that humans are always the weakest link in the security chain of any internet service.