The system that Bitfinex put in place was also adopted by other popular exchanges, like Kraken and BitStamp. While details of precisely how the Bitfinex hack took place are scarce, BitGo, the firm behind the multi-sig system, has said its servers were not compromised. The other exchanges using BitGo’s system have also remained secure so far.

The possibility exists, then, that the problem was not the multi-sig system, but Bitfinex’s specific implementation of that system. As Sirer points out, multi-sig only works when signers are independent of one another. In the Bitfinex scenario, its vendor, BitGo, was the co-signer. “One of the co-signers is working at the behest of the other, the exchange. So there is a single point of vulnerability,” he said.

Sirer has proposed a security fix that would allow victims of theft to claw their funds back. He calls it a bitcoin “vault,” and he and other researchers at Cornell have built a working prototype. But the bitcoin protocol itself has to be changed in order for it work, which seems like long shot, given that the community of developers is riven by a long-running conflict over how best to increase the digital currency’s transaction capacity.

The history of bitcoin exchanges is Darwinian, marked by abrupt failures triggered by security breaches. If you run a big bitcoin exchange, it’s usually a question of when, not if, your defenses will be breached.

Bitfinex’s suspension in the wake of the heist means that the position of the world’s biggest bitcoin-US dollar exchange is up for grabs once again. Bitfinex came to occupy that position after another exchange, Bitstamp, once the biggest marketplace for this type of trading, was itself hacked in early 2015. And Bitstamp came to prominence in the wake of the failure of Mt. Gox, once a pillar of the crypto economy.

For bitcoin’s traders, it’s just another day in the markets. The digital currency plunged some 14% when the Bitfinex hack was revealed. But it has recovered most of those losses since, rising steadily in the meantime. The price of the cryptocurrency is now trading at just 5% below pre-hack levels, according to the widely used price index from CoinDesk.

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