A group of former Goldman Sachs employees has announced that they have raised more than $3 million toward the development of a startup company meant to provide greater surveillance for the cryptocurrency market. This came a day after Coinbase acknowledged that blockchain technology has not been as successful in preventing hacking as once thought.
The former Goldman Sachs FinTech engineers founded Solidus Labs, a company that has developed a series of artificial intelligence programs that are able to monitor and surveil trading platforms. The investment will be specifically used to help engineer programs to create artificial machine learning applications, as well as to improve the operations of the business.
In a statement, Solidus explained that many of the cryptocurrency exchanges are using outdated technology on their trading platforms, opening the door for hackers to find vulnerabilities that can give them access into user accounts and trading information. Without any form of regulatory control, Solidus’ CEO Asaf Meir explained that this new technology will help to monitor and prevent those who will attempt to manipulate the trading platform.
This news comes on the heels of a report by Coinbase that hackers were able to “double spend” up to $200,000 using the digital currency Ethereum Classic. This was disturbing news for Coinbase for a multitude of reasons, starting with the fact that the company had just purchased blockchain technology designer Neutrino for the specific purpose of blocking hackers from accomplishing what occurred with Ethereum.
While blockchains have long been viewed as the perfect cybersecurity option, the truth is that hackers have long seen this technology as an easy mark. Because fraudulent purchases and transactions cannot be reversed, hackers find blockchains to be the best avenue to strike, solely because there is no way to reverse the transaction once it has occurred.
Since 2017, it is believed that hackers have stolen more than $2 billion of cryptocurrency, much of which has been lost. Blockchains were supposed to be the answer to any vulnerabilities, as this technology was referred to as “unhackable.” This is why Coinbase was willing to purchase Neutrino to assist in implementing blockchain technology for their exchange services.
Solidus to the Rescue
While Solidus will also be using blockchain technology as a primary feature of their services, the big difference will be in the artificial intelligence that is included as part of their design. The program will be able to learn as it views millions of transactions occurring, looking for vulnerabilities while determining what needs to be done to prevent attacks.
During the recent World Economic Forum, many insiders concluded that cryptocurrencies could see a dramatic increase in 2019, meaning that this technology could be coming at a time when it is needed most.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
