The System Vulnerability Witnessed by Bitfinex Technology Essay (Essay Sample)

The System Vulnerability Witnessed by Bitfinex
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Introduction
Bitcoin is the most popular cryptocurrency that uses blockchain technology to record transactions. Bitcoin security relies on proof-of-work (PoW) which based on a distributed consensus mechanism or protocol (Ølnes, 2016). In recent time Bitfinex hack has been the most massive cryptocurrency system breach in recent times. The significant growth in Bitcoin’s value in the market has attracted many hackers whose intentions are to exploit the system vulnerability for financial gains. Since the inception of Bitcoin in 2009, its estimated value has risen to over 170 billion dollars. Researchers try to figure out countermeasures to ensure the system remains safe from hackers and predict new trends of system manipulation. The security threats inhibit the normal functioning of Bitcoin. Stockbrokers, financial institutions, Forex traders and investors are the most affected by Bitcoin hacking and illegal mining of its resources.
Peer-to-peer (P2P) controls Bitcoin without any regulated third party like banks or financial institutions (Ølnes, 2016). The technology serves as a bank or other centralized services independently. Bitcoin owners possess full control of their bitcoins and can utilise in whatever manner they please without involving a centralized authority. Bitcoin uses open-sources technology and ownership is open to anyone who has the currency in his or her possession. Bitcoin is a form of secure digital payment system that involves virtual currency. Numerous have attracts have targeted various aspects of Bitcoin such as netsplit, double spending, mining pools and transactions malleability. Many researchers have stated that Bitcoin does not work practically due to lack of research on its system vulnerability.
Bitfinex Hack