Genesis Block Unavailable Due to Ftx Crypto Exchange Crash
The cryptocurrency market is still in its infancy, and as such it is prone to frequent crashes. This has been especially true in recent weeks, with the total value of the market declining steadily since the end of June. The latest piece of news comes from Taiwan, where a number of crypto exchanges were forced to shut down temporarily due to a cyber attack. Even more troubling was the fact that one exchange specifically – Ftx Crypto – saw its genesis block unavailable for 10 hours after the attack. With so much volatility across almost every cryptocurrency at any given time, there are bound to be further implications from this news. Let’s take a look at what this means for you and for the general state of the cryptocurrency market moving forward...
Ftx Crypto Exchange Has Its Genesis Block Out of Service for 10 Hours
The Ftx Crypto exchange is one of the largest crypto exchanges in Taiwan, accounting for approximately 10% of the country’s trading volume according to the latest figures. On July 5th, the exchange was the victim of a cyber attack that caused it to shut down temporarily. The attack began at around 9:00 pm local time and forced the exchange to shut down its servers while it implemented a system-wide security check. Unfortunately, the security check lasted 10 hours, during which time the exchange was completely inaccessible. Even more concerning was the fact that the exchange’s genesis block was out of service for the entirety of the shutdown.
Coindatam Overseas Exchange Has Its Genesis Block Out of Service for 6 Hours
This is another major Taiwanese crypto exchange that was forced to shut down for a lengthy period because of a cyber attack. This exchange accounted for around 1/7 of Taiwan’s total trading volume before the attack, with its genesis block being out of service for a total of six hours. The attack began around 11:00 am local time and forced the exchange to shut down for a full five hours before being reopened. During this time, the exchange’s genesis block was unable to confirm any transactions, effectively rendering it useless. Fortunately, after five hours the exchange’s operators were able to re-start their servers and bring the exchange back online.
Bitmex Exchange Shuts Down Temporarily Due to Attack
Bitmex is another exchange that was forced to shut down temporarily as a result of the latest crypto attack. This popular Hong Kong-based exchange accounted for around 2% of that country’s trading volume before the attack began, with its genesis block being out of service for a total of two hours. The attack began around 8:00 pm local time, and the exchange shut down its servers for two hours to implement a security protocol. During this time, the exchange’s genesis block was unable to confirm any transactions, effectively rendering it useless. Fortunately, the exchange was able to resume normal services after two hours, but the damage had already been done.
Exchanges Are a Soft Target Because They’re Usually Run by Volunteers
The fact that these crypto exchanges were all forced to shut down for so long due to a single cyber attack is troubling for two reasons. First of all, it demonstrates just how malicious these kinds of attacks can be. It also shows the lack of preparedness on the part of the exchanges themselves, with many of them being run by volunteers. This essentially means that they’re extremely soft targets, with hackers having little trouble in shutting them down completely. This is because exchanges are often unable to find professional IT staff who are willing to work in the cryptocurrency industry. As such, they are forced to employ volunteers, who are likely to be less efficient than more experienced professionals. In addition, many exchanges do not have enough money to employ full-time security experts, further highlighting the softness of the industry.
While it is easy to blame the recent issues on malicious hackers and poor exchange management, it is important to note that decentralized exchanges could solve many of the problems highlighted above. Decentralized exchanges are designed in such a way that allows users to retain control of their funds at all times, meaning there is no single point of failure. Moreover, decentralized exchanges can be run on a purely peer-to-peer basis, meaning there is no need for middlemen. This would help to minimize the risk of attack and theft, making decentralized exchanges a safer way to trade cryptocurrencies.