In the 2013–2017 period, 29 hacks occurred in the Bitcoin market where a total of 1.1 million Bitcoin were stolen. Noting that the average price for Bitcoin (BTC) in December 2020 exceeded $20,000, the corresponding monetary equivalent of losses is more than $22 billion, which strongly highlights the societal impact of this criminal activity.
What did crypto exchanges do to address this problem? Nowadays, about 90% of exchanges use some kind of cold storage system, which means that digital assets are stored offline. Keeping Bitcoin offline considerably reduces the threat from hacking attacks.
Klaus Grobys is a docent in financial economics at the University of Jyväskyla and an assistant professor of finance at the University of Vaasa. Grobys is also affiliated with the research platform InnoLab at the University of Vaasa. His recent studies investigate the opportunities and risks associated with new innovative digital financial markets. His recent research was, among others, covered by U.S. business magazine Forbes.
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