Lesson 3: Has there been an incident on a cryptocurrency exchange?

Mt.Gox, the spark that ignited the cryptocurrency boom

Mt.Gox is a Japan-based cryptocurrency exchange that began operations on July 18, 2010 (at the time, 1 BTC = $0.07).

On June 19, 2011, Mt.Gox was hacked and approximately 850,000 BTC were stolen.

This hacking incident is referred to as the "Mt.Gox".

This incident was very big news around the world at the time when cryptocurrencies were in their infancy, and it also triggered the spread of cryptocurrencies in Japan, where the company was based.

This hacking incident was caused by a problem called "transaction malleability," which allows for the creation of fake transaction IDs for transactions.

The hackers used transaction malleability to pass off the fake transactions as legitimate ones, and successfully transferred the bitcoins managed by Mt.Gox

Understand how to handle cryptocurrency

This incident has taught us a lesson in dealing with cryptocurrencies.

In exchange hacking incidents, the user's cryptocurrency is basically the target.

As we will learn in detail in the next lesson, in most cases, the user's cryptocurrency managed by the exchange is kept in a single wallet.

Since hackers have the idea that if they are going to hack, they will hack a wallet that manages many cryptocurrencies, the wallet in the exchange is an easy target for hacking.

Those who experienced the Mt.Gox incident have since learned to always manage their cryptocurrencies in their own wallets and not in exchanges.

What we should learn from the exchange incident is to be prepared to take full responsibility for managing cryptocurrencies and to manage them in our own wallets.