Disaster strikes a digital currency.

This article from the New York Times really caught my eye. It seems that a new digital currency that was about to be launched was siphoned off more than 50 million of digital money. It was a crowd funding venture that was deemed very successful. They wanted to prove the safety and security of digital money. So much for that.

Experts had already pointed out some vulnerablities in the code in late May but nothing was done it seems. The only good thing is that the money is not really gone, only frozen in something called a digital version of an airtight double door. The real debate now it seems is to write code that would retrieve it or leave it there. But some purists believe that human meddling should not happen. Debates about whether to fork or not as they say is still raging.

The other famous digital currency called Bitcoin as also suffered from such an attack. In 2014 half a billion dollars worth of Bitcoins were lost. But it is interesting to note that Bitcoin has bounced back every time such thefts have occurred. It is resilient if nothing else.

The beauty of theses digital currencies is that governments do not control them, but individuals or groups do. At the heart of the matter is trust, who can you trust to operate and control such a currency.

I was reading a few days ago that even the Bank of Canada is presently experimenting with software that would create a digital currency. I am not sure that I would consider using it, although I would trust a central bank more than some anonymous groups or people. As far as I can see, only those called early adopters would embrace such a risky scheme. Only when more safeguards exist will people embrace it and not before as the risks are too high.

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Filed under Essays, Uncategorized

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