In a neat arrangement, the largest cryptocurrency exchange in the world by trading volume is launching a public, decentralized ledger in a bid to circumvent future phishing and hacking attempts. Posting on its website, Binance said that it would roll out the public blockchain to provide traders with a decentralized exchange running on autopilot, eliminating the tempting, centralized prize of a ‘honeypot’ of funds.
A Chain for Chain Enthusiasts
Binance did itself proud in its management of a recent well-orchestrated phishing attack on its users. System protocols shut down servers after auto-flagging irregular movement, and while a very few users succumbed to the attack, it was foiled entirely by Binance’s in-house security measures.
The pending network, known as Binance Chain, will accommodate cryptocurrency traders on a decentralized exchange that will enable transactions via an automated process, thus removing the need for any third party to hold or trade funds.
With the memory of Mt. Gox not yet faded following a recent mass-liquidation of bitcoin funds, exchange security has attained pole position on industry players’ and regulators’ agendas.
The rewards of a successful heist are typically huge, and although stolen coins can usually be tracked down after a heist, it is proving difficult if not impossible to retrieve them, much less bring thieves to book.
Binance’s solution looks to disperse the centralized exchange funds that constitute such temptation among users’ wallets on a decentralized platform.
Since the start of 2018, Italy and Japan have been in the news as targets for cybercrime, with hackers making off with around $700 million so far.
Already dancing a merry jig in anticipation of what regulators might do to cryptocurrencies in 2018, industry players are now at pains to demonstrate heightened security and visibly improved fiduciary responsibility towards users’ assets.
With self-regulatory bodies emerging in various countries across the globe, current discourse points to both the industry and the lawmakers welcoming this as a first step towards greater legitimacy for digital exchanges and the coins themselves.
After what the company described as a “large-scale phishing and stealing attempt,” Binance has offered around $250,000 in digital currency to anyone providing information that brings the attackers to justice.
For now, the new Binance Chain platform is still under development, and the company has yet to pinpoint a release date for the new offer.
Binance Setting a Precedent for Exchange Security
Binance was launched mid-July 2017 and grew meteorically in the first few months, with an organic growth that mirrored Bitcoin in no small degree. The company is officially a Hong Kong resident, although its servers are located in Korea.
Binance had to eliminate Chinese users after the PBOC governor came down hard on bitcoin and cryptocurrencies in general, but it continues to accumulate users and grow from month to month.
If Binance’s model solves the problem of criminals successfully targeting exchanges, it could well be adopted as an industry norm.
Binance Coin (BNB), the company’s cryptocurrency, is to be based on Binance’s blockchain. The coin leaped up 23 percent after the Binance Chain announcement.