Honest question. How is it that the traditional banks stay comparatively secure from hacks and the crypto scene is an endlessly reporting the next big breach?
Maybe the crypto exchanges should hire some bank security experts or at least adopt their best practices
I'd wager that it's because banks are able to reverse transactions, so even though there must be hackable banks out there (on account there being thousands of them), it must be incredibly difficult to monetize.
Additionally, if you hack a crypto exchange it isn't clear that law enforcement will be all that interested. If you steal from a bank, or from the people who've made deposits at that bank, it's a different story.
Lastly there's an infrastructure of coin laundries to facilitate crypto heists that's accessible to everyone, but in "tradfi" that infrastructure either doesn't exist or isn't generally available.
I forget who, but some human described crypto as speedrunning the past century or two of financial history, which seems apt. I think the traditional banks and regulators learned similarly hard lessons too, it was just mostly before I was born.
Well, you should consider what exactly would be hacked. Banks don't really hold huge amounts of gold or physical cash anymore, most of what they have is 'credit' and debt.
Cryptographic currencies are not credit, they are the gold. They are what gold would be if it were easily divisible and could be transferred anywhere, instantly, for only several cents worth of transaction fees.
Despite how quickly you can transfer cryptocurrencies, you could secure it as well as you physically secure gold if you really wanted to. The problem is that there are a bunch of businesses who are holding peoples' gold for them in such a way that bidirectional channels exist between front-end machines and back-end machines that have the private keys on them, and there is no regulation instructing these wannabe banks to perform cryptographic signatures on airgapped machines. It is as if Fort Knox were just leaving all of its entrances open.
