“The big exchanges that hold customer deposits are a big target for hackers,” Voorhees said.
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When hackers penetrated a secure authentication system at a bitcoin exchange called Bitfinex earlier this month, they stole about $70 million worth of the virtual currency.Not only does that approach cast the cybersecurity risk in stark relief, but it also exposes the fact that bitcoin investors have little choice but to do business with undercapitalized exchanges that may not have the capital buffer to absorb these losses the way a traditional and regulated bank or exchange would.No technology, cryptocurrency, or financial mechanism can be made safe from hacks," said Tyler Moore, assistant professor of cybersecurity at the University of Tulsa's Tandy School of Computer Science, who will soon publish the new research on the vulnerability of bitcoin exchanges.His study, funded by the U.S. Department of Homeland Security and shared with Reuters, shows that since bitcoin's creation in 2009 to March 2015, 33 percent of all bitcoin exchanges operational during that period were hacked. In the most recent study, the rate of closure for bitcoin exchanges in Moore's research edged up to 48 percent among those operating from 2009 to March 2015 .Bitcoin exchanges overall could be launched for as low as $100,000 up to $1 million, said Erik Voorhees, founder and chief executive officer of digital currency exchange ShapeShift.
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