Blockchain Solution

Is this the End of Crypto-Exchange Hacks – Vitalik Buterin on the Case

Very well respected and famous for being the co-founder of Ethereum – Vitalik Buterin, has introduced a scaling solution which could find use by digital currency exchanges and trading platforms to be more hack-secured. The mentioned solution is named Plasma Cash, which is an improved or evolved version of the existing method – Plasma.

For a couple of weeks now, headline of news were events of hacks that did take place in the crypto-currency exchange ecosystem in a global scale.  Some hacks that have been in the news are Coincheck and BitGrail.

Together with Dan Robinson and Karl Floersch, Buterin did come up with the idea and developed Plasma Cash. The Plasma solutions itself has been shown to the crypto-community for the first time in Aug 2017. The method functions by reducing transaction fees for smart contracts and DApps while optimizing data.

Solutions always are found for the better which might not be the perfect finally of the project. When it comes to Plasma, its issue is that users are required to download and authenticate each plasma block that could lead to future scaling complication.

In an equal value of Ether, a Plasma coin would be created proportionally with an ID that cannot be split or changed. The event would take place when a user deposits ether on an exchange or a different third party platform – according to Buterin.

“A user actually only needs to verify the availability and correctness of the Plasma chain only […] at the specific index of the coin, of any coins that they own and any coins that they care about. Regardless of what happens in the exchange, users can run their money through the Plasma exit procedure and get their money out.”

This could be the way to go for crypto-exchanges. The Plasma coin that was created during the process would be connected to an owner which would be not interchangeable or fungible. In order for someone to steal a coin, the owner of it would have to know about it.

“Whenever the next big multi-billion-dollar cryptocurrency exchange written by a totally incompetent developer gets hacked, no one will lose any money.”