Bitcoin exchange platforms have an obligation to keep user funds safe at all times. Over the past years, that has not always been the case, and much money was lost due to hacks. Bitstamp, one of Europe’s biggest exchange, has announced they will add support for hardware wallet solutions. Both Ledger Wallet and Trezor will be supported, Fintechist understands.
Adding hardware wallet support to an exchange platform makes a lot of sense. Users need to be nudged in the right direction when it comes to securing Bitcoin funds. That means not keeping money in the exchange, but transferring it out as soon as possible. Both Ledger and Trezor are working on secure cryptocurrency transactions, particularly in the offline department.
Bitstamp Beefs Up Platform Security
Bitcoin enables users to be their own bank at any given time. Unfortunately, most novice users store funds in exchange wallets, which are often targeted by hackers. While not all attempts succeed, those who do will result in financial losses. Using Bitstamp in combination with hardware wallets makes a lot of sense, as it provides additional security.
This decision has nothing to do with the way Bitstamp is currently operating, Fintechist understands. Nor is it a subtle jab at their BitGo implementation. This latter company was also assumed to be responsible for the Bitfinex theft, but that was not the case. Bitstamp remains confident Bitgo is the right partner for the job.
Depending on how this integration is received, additional wallets may be supported in the future. Many Bitstamp customers requested hardware wallet support, Fintechist understands. With Bitstamp turning five years old this week, this addition is a positive sign for the future.
Whether or not other Bitcoin exchanges will follow this example, remains unknown. Security should be on more people’s minds than it is right now. Leaving funds in the hands of a third-party service provider is asking for trouble. While most companies have invested heavily in security, hackers always seem to find a way in.
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