Since the time the first trading platform was launched in 2010, hacks in bitcoin exchange have badly affected the cryptocurrency ecosystem. Due to this, many public relations issues occurred in the crypto asset market. It is true that exchange hacks have nothing to do with major technical problems related to the Bitcoin network. But, it causes stress when billions of dollars (Bitcoin) are stolen from exchange within a fraction of minutes.
Over the years, bitcoin exchange industry has refined its potential to handle the security of the crypto assets. But, the next hack threat is always hovering over the entire ecosystem. However, this might change soon.
Bitcoin’s prime feature is that this is programmable money. And, the developers have found out new methods to build exchanges in such ways that do not demand the users to turn over the hold of their funds until the time they want to trade. New exchange named Nash is taking benefit from this technology.
How Does Nash Keep Customers’ Funds Secure?
Earlier, exchange customers used to deposit their coins on the trading platforms, where exchanges take custody of their funds. That exchange platform was prone to fall victim to the hackers, as they can turn into a big deal if they get to hold onto the exchange’s internal wallet.
Nash is a platform, which allows the users not to hand over their crypto assets’ custody to a third-party before they start trading. Many Bitcoin users are happy about the lightning network’s power to slash transaction costs, accelerate transaction and enhance user’s privacy. And, this similar technology can be implemented to upgrade the security level offered by Bitcoin and cryptocurrency exchanges.
To manage trades, Nash implements a system of state channel smart contracts. And, the system is presently live on the Neo blockchains and Ethereum.
Nash co-founder Fabio Canesin states that Bitcoin is soon to be part of their platform. State channels enable different parties to carry out transactions within each other in Bitcoin and cryptocurrencies without interfering the blockchain. A key advantage of using state channels is that the users do not need to wait for blockchain confirmation to go ahead with their trades.
Bitcoin’s developers admit that cryptocurrency is an experiment, which might fail. And, exchanges like Nash are a crucial step to improve both security and usability of this technology. Two members of the U.S. Congress admitted recently that it will be hard for the government to implement a ban on Bitcoin.