• Karpeles’ Mt. Gox exchange was hacked for  850,000 bitcoins.
  • The administrators should modify the entire bitcoin security infrastructure, Karpeles suggests. 

Mt. Gox manager Mark Karpeles has spoken about improved security on the blockchain and bitcoin in his new book “Cryptocurrency 3.0”. Karpeles reported in an interview that “it is dangerous that Bitcoin will continue to exist with the current encryption technology.”

Karpeles was the owner of the infamous Mt Gox exchange which was hacked for 850,000 BTC in February 2014. Mt. Gox was among the first sites where many crypto dignitaries bought and sold Bitcoin. Soon, the company went bankrupt and Japanese police arrested Karpeles as he admitted his fault.  

Karpeles said: 

“Although I was able to win my case in March 2019, I am very sorry that I caused a great deal of damage to customers and caused inconvenience to the people involved.” 

Karpeles also expressed that he faced the difficulty of running a popular exchange from his office in Japan:

“When I took over the management of Mt. Gox in 2011, I worked with the members of the field and a team of lawyers from various countries in order to cope with the system issues that will be discovered one after another and the rapidly increasing transaction volume. “I was monitoring on a 24-hour basis. At that time, it would be nice if I could sleep for 2 hours. Dealing with time difference between foreign countries meant I sometimes had a conferences scheduled for 2 or 3 o’clock in the morning. Perhaps now, the people in charge of operating the virtual currency exchange centers have learned to manage this pressure. However, human error cannot be prevented as long as risk is covered manually.”

Karpeles suggests that the administrators should modify the entire bitcoin security infrastructure. 

“There is still the risk of the virtual currency being stolen as a PC or hardware wallet may be hacked. In other words, with the current mechanisms and technologies, it is still impossible to eliminate risk. Innovation of cryptographic technology is a must.”

He further added: 

“The point is encryption technology. Bitcoin itself has been using a technology called ECDSA from the beginning and has never been hacked. However, as it is difficult to eliminate hacking damage, you will have to think that there is also no permanently safe cryptographic technology. It is dangerous that Bitcoin will continue to exist with the current encryption technology.”

He also announced the establishment of a new startup called Tristan Technologies Co that aims to build this new tech.

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