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Study: 45% of Bitcoin Exchanges Currently Failing

by on April 29, 2013

Wired UK reports on an interesting study that shows 45% of Bitcoin exchanges (web-driven exchanges that offer a service of changing Bitcoins into other fiat currencies, or back again) have failed.

Granted, the sample size is relatively small, given the short time Bitcoin has been circulating, but digging deeper into the numbers is even more surprising. Of the 40 exchanges examined, 18 have gone out of business. Of those 18, 13 of them closed without warning, and the other five closed after suffering security breaches that forced them to close.

The most important point to make here is that of the 18 closures, only six have reimbursed their customers so far.

The four largest surviving exchanges are seeing a constant barrage of cyber-attacks. The study said: “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.”

You can see the full study here. It was presented at the 17th International Financial Cryptography and Data Security Conference.

From → Security

One Comment
  1. Reblogged this on World Of Bitcoins and commented:
    …and that probably doesn’t necessarily mean 55% are working correctly…Scary to think about…Thanks to The Gotham Blog for the post…

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