Bitcoin has a tremendous amount of power and influence, and it used that power and influence so shrug off a crypto-heist that involved another cryptocurrency by the name of Tether. Although prices did initially take a tumble, it’s quick recovery saw it bounce back to over $8,000.
You can see from the chart above, the result this had on trading with many stop losses being taken out and forcing traders out of their positions. Only for price to, not only reach levels before the incident, but reach all time highs.
The sell-off occurred after the cryptocurrency firm Tether, was targeted by cyber criminals who managed to get away with a $31 million heist. The firm released a statement saying that
“$30,950,010 of the tokens were removed from the Tether Treasury wallet on sunday and sent to an unauthorized bitcoin address”. A spokesperson from the Tether team said that they would like to blacklist the address, so that the tokens that were stolen cannot be exchanged into dollars. There were some within the cryptocurrency community who scolded the company for its lack of openness in dealing with the situation, and the apparent implications of it wanting to disable the address.
The company was set up as a proxy so that fiat currencies like US dollars, Euros, and the Japanese Yen could be sent between exchanges including, Bitfinex, Poloniex as well as others. It uses the same decentralized, open ledger system known as blockchain but claims that it avoids Bitcoin’s volatility through currency pegs. Questions have been raised about the Tether and Bitfinex relationship, and whether the claims that Tether has $400 million in US dollar reserves to back it’s tokens are true. Find out the details on Mashable.
If the relationship between Tether and Bitfinex collapses, it has the potential to bring the cryptocurrency markets along with it, since Bitfinex is one of the largest exchanges. In the past, traders have experienced a crash like this a few years back, when Mt.Gox was the powerhouse of the bitcoin exchanges and it collapsed in 2014. Find out more about Ethereum Wallets, Secure Bitcoin Wallets, And Other Cryptocurrency Wallets.
Bitcoin security flaws
The original design of the protocol and cryptography that Bitcoin uses is still being used today, which shows that it’s been well thought out with the intention of lasting for many years. However, security flaws have been found and fixed over time to ensure the security and integrity of the transaction process. It’s often a case of a race against time when it comes to security flaws in technology, because the quicker something gets resolved, the stronger that technology becomes.