Chapter 12Select Heists
Business journalism geeks love Matt Levine. In fact, lately, he's become so popular there's a certain class of journalist who seems to be starting to hate him because too many people like him. So it goes!
The aforementioned Levine is a columnist at Bloomberg who used to be a lawyer. Every weekday he writes a smart and funny roundup of business news. Levine wrote something cheeky about cryptocurrency exchanges in 2017:
The other reason not to trade bitcoin is that, as far as I can tell, the fate of any bitcoin exchange/wallet/bank/custodian is to be hacked. That is just how bitcoin works: You buy bitcoins on an exchange, and you store them at the exchange because it's a pain to keep your private key yourself, and then the exchange gets hacked and your bitcoins get stolen.
Bitcoin was still very much the main thing on people's minds back then, but a lot of people were also buying bitcoin because they wanted to buy into initial coin offerings.
What he wrote was sort of right, but if he could write this again, I'd hope he would strike “wallet” from his list. When wallets get hacked, it's usually been the user's mistake.
But it's true that basically all exchanges have been hacked, to greater and lesser extents. A third‐party exchange is no place to keep cryptocurrency when an owner is not actively trading.
There are four reasons why exchanges are bad places to keep cryptocurrency.
- Ideological. Satoshi created Bitcoin because he wanted people to actually ...
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