The tragedy of MtGox and a SAFE solution

MtGox users broke the cardinal rule of cryptography. Keep your private keys private. When users purchase Bitcoin from one of these third party services they are required to create an account and store their private keys on third party centralized servers. MtGox users, not knowing any better did what they have always done and trusted these third parties with their private data. I bet that most MtGox users did not understand what they did wrong until it was to late.

The solution to this problem is inherently built into the SAFE network. When and if users purchase Safecoin from a third party service, they will be required to create a SAFE account with the SAFE network ensuring that their private keys will be kept private. No longer will users trust their private keys with third parties. The SAFE network will inherently protect users that are not security and tech savvy from themselves.


I think the problem is more that you have to trust a third party if you want instant transactions (such as when trading).

Safecoin will help this, as transactions will be at network speed. However, the counter asset being traded may not be (fiat money, for example). There is nothing to stop an exchange from completing a trade, but then refusing/failing to deliver the counter asset.

Ofc, you shouldn’t leave your assets at an exchange long term either way though, which is the private key trust thing still.

1 Like