The Bitfinex incident cannot shake the Bitcoin protocol, but don’t underestimate Bitcoin’s resilience

Although the past week or two has not had any positive impact on Bitcoin, the cryptocurrency remains very resilient. The Bitfinex hack could easily have weakened other currencies or investment vehicles, but not Bitcoin. Although some media outlets have blamed the hack on the Bitcoin network, this is completely untrue.

Exchanges are not part of the Bitcoin protocol

First of all, a hack of a Bitcoin exchange does not mean that there is a problem with the Bitcoin protocol. Exchanges are centralized companies that operate in a decentralized environment. Although exchanges are not banks in the traditional sense, they are a place to buy, sell, and even store Bitcoin.

Whenever a Bitcoin exchange is hacked, it can be considered a case of a bank losing money. If such an incident occurs, it is not the fault of the funds. It does not mean that the funds are flawed at their core, because this is an isolated incident and has nothing to do with the 'protocol' of funds as we know it. The same applies to Bitcoin, because the technology that powers this network is unhackable and more secure than any other form of value transfer in the world.

However, this does not mean that all companies that trade Bitcoin are safe. The Bitfinex hack, which resulted in the loss of approximately $65 million worth of Bitcoin, did not have a negative impact on the technology that powers this famous cryptocurrency. Some media outlets may want people to believe this, but what they are doing shows that they are not very well-informed on the issue.

Centralized exchanges are the weak link in the Bitcoin protocol. Although they trade cryptocurrencies, the technology they use to protect funds has always been unsatisfactory. In the case of Bitfinex, we still don’t know how the attackers took the funds. However, it is clear that the company was at fault and responsible, and they were the weakest link.

Don’t underestimate Bitcoin’s resilience

While some may think that such a hack would destroy the price of Bitcoin, this is not true. We acknowledge that there was a brief decline in the price of Bitcoin after the Bitfinex hack, which caused the price to drop by as much as 20%. However, it now appears that the price of Bitcoin has recovered well and is currently back to $591.

Attacks like Bitfinex are not unprecedented in the history of Bitcoin development, however, none of them have successfully defeated Bitcoin. Bitcoin will not be defeated so easily. Hacker attacks do have a negative impact on the concept of Bitcoin, but they do not affect Bitcoin technology. Attacks cannot lower the price of Bitcoin for a long time.