The Bitcoin Meister #7 – Lessons Learned From Previous Crypto Exchange Hacks

Hello everyone. This is Adam Meister, the Bitcoin Meister, the disrupt Meister.

I’m here in Cyprus where it’s really warm, but I’m happy to be back on the cryptocurrency market channel.

Hello Tai Zen and Leon Fu, it’s great to be back and I was inspired to make this video.

Because of all of the hype surrounding the upcoming August first bitcoin segwit BIP148 controversial date, there are people who do not seem to want to learn from history or maybe they just don’t know their history.

Therefore, I’m here to tell newbies and people having short memories about some recent history that pertains to what is about to happen in bitcoin.

Right now, people are starting to pool their Bitcoin off of exchanges. They want to control their own private keys and store their Bitcoin on a Paper Wallet, on a Trezor, on hardware like Trezor or a Ledger Nano.

They don’t trust the exchanges to handle the upcoming turbulence while the others do. Well, we’re going to go over some examples of when some exchanges didn’t handle their Bitcoin or their cryptocurrency very well.

Again, many of you probably already know about this. There are a lot of new people out there who don’t understand the simple fact that if you don’t control your private key, you really don’t own your Bitcoin.

When you’re keeping your Bitcoin over on Coinbase or Poloniex, you don’t really own your Bitcoin. They can just shut down, but you keep thinking they’ll never shut down.

Let’s go back to 2013 in the case of Mt.Gox. I think everyone’s heard of that. That was a big exchange in Japan. One day, someone stole a lot of Bitcoin from it. It shut down. The price of bitcoin dropped.

Some people probably say things have improved so much since then. Everyone knows about Mt.Gox. No one else wants to become Mt.Gox. They have precautions. They would never be stolen.

Well, let’s go back to the last year 2016. A lot of you weren’t around in 2016. Have you heard of Cripsy? Cripsy was an altcoin, where you can get altcoins for your Bitcoin.

It was very much like Poloniex and it was very popular. People would buy Dash and everything there. It was great fun until one day the CEO or someone stole like $3,000,000 or $30,000,000 worth of cryptocurrency from there, then ran to China.

Back in 2016, maybe they lost 100 Dash, which is only worth $3 each. Now, Dash is worth $200.

As you can see, it happened again and it can happen to Poloniex today. I’m not saying that’s going to happen, but it could happen.

People were storing all sorts of altcoins there that are worth a lot more today, so you should think about that.

However, that’s not it. Some people said that BTC-E still existed and they didn’t lose anything.

Do you remember last summer when Ethereum split into Ethereum and Ethereum classic?

Now, some people think Bitcoin is going to split into two. Everyone is assuming that all the exchanges handled the Ethereum classic split fine. They were prepared.

Did they? Because BTC-E didn’t have Ethereum classic for anyone. They just said Ethereum classic is a scam. That was their answer. That’s how they prepared. Therefore, if you had Ethereum at BTC-E, you didn’t get any Ethereum classic.

You probably say Ethereum classic was only worth like $1. Well, now it’s worth about $20. If you were keeping your Ethereum on BTC-E, you don’t have Ethereum classic that you’re entitled to.

Guess what? They didn’t lose it and they were not punished at all. That’s the way it works.

Of course, Bitfinex was recently hacked last year. They’re going to return people the value of what they lost in terms of USD, but there are a lot of people who didn’t want to wait around and didn’t get the Bitfinex tokens.

There was a whole production that you had to go through in order to become reimbursed. A lot of people didn’t do it. The point is Bitfinex is a major exchange, which was hacked.

It lost people’s value. Temporarily you may say or forever you may say. Who knows? But it happens and we have to learn from history. If it happened once, twice, three times or four times, it’s going to happen again.

You should not press your luck and store any of your cryptocurrency at these exchanges. Just be ready for something like this to happen and don’t complain because you were warned about this.

To me, cryptocurrency is about avoiding third parties. Storing your Bitcoin or your Ethereum or wherever at an exchange is relying totally on a third party to own your coin.

You don’t own your coin unless you control your private key, so get yourself a Trezoe or Ledger and be ready for what’s going to happen on 1st, August.

Again, people have already started taking their Bitcoin off these exchanges and the hardware wallet had been sold out in so many places to keep your keys in.

People are learning and know that they cannot trust these exchanges to handle the upcoming situation. There are all sorts of rumors out there.

As soon as there are enough people take their Bitcoin off of an exchange, it might be hiding the fact that they don’t have all the Bitcoin. Then, some of it might get exposed and another one might go down.

You don’t want to be the one who had coin sitting there during this whole thing. Again, it’s good to learn from a history lesson in cryptocurrency.

There are a lot of new people surprised that this just happened in the last year. Most of those stories happened since the beginning of 2016.

This isn’t something that happened in 2013 or a long time ago. It will happen again. It happened recently because it’s a growing industry.

They’re going to be things like this that happened, so remember to control your own private key.

I’m Adam Meister, the Bitcoin Meister. You can see all the videos that I upload every single day by going to disruptmeister.com. You can search on google Bitcoin Meister, Adam Meister, @TechBalt t on twitter.

Thank you Tai Zen and Leon Fu.

 

Check out Adam Meister, the Bitcoin Meister™, the Disrupt Meister™ at:

http://www.DisruptMeister.com/

https://steemit.com/@bitcoinmeister
https://www.youtube.com/user/BaltimoreHourly

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BTC: 124ZqLGRePVx4P6YSDLnzjETZ1ByFsDTfb
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