Tag Archives: wired

Nearly half of Bitcoin exchanges fail

A recent Wired UK study concluded that a whopping 45% of Bitcoin exchanges have failed, usually resulting in the loss of users’ deposits. Exchanges that manage to stick around are typically under constant attack from hackers looking to commit virtual heists. From the article:

Exchanges handling 275 Bitcoins’ worth of transactions each day have a 20 percent chance of being breached, compared to a 70 percent chance for exchanges processing daily transactions worth 5570 Bitcoins. [The researchers] estimate that the median lifespan of any Bitcoin exchange is 381 days, with a 29.9 percent chance that a new exchange will close within a year of opening.

Let this be a warning to anyone holding non-trivial amounts of digital currency: don’t treat exchanges like banks! Keep the majority of your bitcoins (and other altcoins) in local encrypted wallet files, preferably stored offline in multiple locations (USB sticks are great for this).