[threeseed]

> They seem to be as susceptible to hacks as non-decentralized systems

Actually far more so.

Banks can afford to spend whatever it takes to secure their infrastructure. Open source projects can't. Likewise banks and other financial services are subject to (at least in most countries) stringent regulations. Open source projects aren't.

And in countries in Australia we have consumer protections which protect the consumer in the event of fraud, theft or security beach (irrespective of who is at fault). Unlike say Bitcoin where we have seen staggering amounts of money, "go missing".

[coralreef]

Banks can afford to spend whatever it takes to secure their infrastructure. Open source projects can't.

Isn't that a benefit of the blockchain? Since its inception in 2008, Bitcoin's database has never been hacked. They don't need to spend money on security, because mathematics is the security. The chain's integrity is powered by decentralized nodes and proof of work. At scale, while Proof of Work is increasing in cost, it is still probably cheaper and more secure than the aggregate cost of securing money at banks, servers, overhead, etc. And there are opportunities to make it cheaper through concepts like Proof of Stake.

[zaarn]

It was hacked atleast once and the hacker assigned themselves a couple million coins.

Last time I worked out the numbers, Proof of Work runs about the same cost as the average US state's bureaucracy. All of it. And the US state's paperwar machinery does a lot more than bitcoin.

Centralized systems have much better options at running efficiently, decentralization is necessarily inefficient.

>They don't need to spend money on security, because mathematics is the security

Everyone working on quantum computers disagrees. The security of current wallets hinges on QC not existing since the ciphers aren't QC-secure.

And until we find something that is provably NP-complete in QC and normal computers while also being easy to use for cryptography, there will always be the hovering Damocles Blade of "your crypto has been cracked".

[fastdev]

It seems like Bitcoin network has never been hacked, but distributed applications were hacked with spectacular monetary losses, for example, "The DAO": https://www.coindesk.com/understanding-dao-hack-journalists/

Blockchain technology has different attack vectors like:

* Bugs in smart contracts/DApps

* Bugs in a client software

* Incorrect handling of private keys by users/admins

All these vulnerabilities were exploited numerous times.

[fooker]

You are comparing apples to oranges.

Plenty (all?) bitcoin exchanges have been hacked and their coins never recovered. You do not need to 'hack' the blockchain to steal bitcoins.

[coralreef]

A bitcoin exchange is not a decentralized system. It is a centralized one.

We are discussing the security of decentralized systems, aka the blockchain.

[fooker]

If only such decentralized systems could exist in vacuum!

The thing about security is that you just need to exploit one weak link in the chain.

[coralreef]

Isn't that the exciting thing about Bitcoin/blockchain? In the future, it is theoretically possible to live life and to conduct all commerce through cryptocurrencies.

The thing about security is that you just need to exploit one weak link in the chain.

Again, we're talking about decentralized systems as a whole. Individuals can be targetted/phished/scammed in any system. What is the weak systematic link in Bitcoin that can be exploited?

[fastdev]

Hacking a crypto exchange is not the only way to steal coins. Decentralized applications/smart contracts on a blockchain can be attacked as well.

[jonny_eh]

Do we know for sure Bitcoin's blockchain has never been hacked? How do we know that some mysterious organization doesn't own a majority of nodes? (honest question)

[coralreef]

I suppose we don't. But if word ever got out that it could be under attack, the value of BTC would crash, and an emergency hard fork would occur. It would take a large investment to try and control/manipulate the hash power to do that, and so to throw away all that money to kill a blockchain that can be simply forked with a new hashing algorithm seems low probability?