Topic: SWIFT hacked...again. What does it mean for Bitcoin? - page 2. (Read 1340 times)

In both cases Swift said insiders or cyber attackers had succeeded in penetrating the targeted banks’ systems, obtaining user credentials and submitting fraudulent Swift messages that correspond with transfers of money.

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The party is over for the old, permissioned, firewall based, electronic fortress, concept of trust-in-payments systems. And the alternative is very far from obvious.

The buzzwords, the sweethearts of the fintech movement, are systems known as distributed ledgers. Two words are about to become part of everyone's vocabulary: Bitcoin and blockchain. There are multitudes of manifestations of these two intimately related electronic phenomena. If you are new to the subject of Bitcoin and blockchain, the learning curve is steep.

The significance of the second Swift failure is this. Trust-based systems, such as those upon which the current payments systems operate, are becoming more expensive to protect at a rapidly increasing rate. The horse race between hackers and firewall builders is being won by hackers in spite of the rapidly increasing spending on internet security.

And these most recent hacks took bank's money, not customer money. That is a game changer.
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The point of the article is this. Now that the bank's own money is being stolen, the financial world will be singing from one hymnal. The time of distributed ledgers is here. There is no longer a question that distributed ledgers will replace our current method of securing transactions. The firewall system no longer has a constituency after the Swift debacle.

What are the implications for investors? First, there is nothing yet you can invest in directly. It is possible to purchase a thing called a crypto-currency. The most prominent of these is called Bitcoin. However, unless you spend the necessary months of research to grasp the underlying determinants of the value of Bitcoin, I have an emphatic one-word recommendation. Don't. This investment is incredibly risky, and those who provide confident forecasts of its future value are deluded or worse.
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