The cryptocurrency industry is rife with hacking. While the majority of coins are nearly impervious to direct attack, the exchange process is more porous. When exchange wallets enter the mix, it becomes both possible – and lucrative – for bad actors to steal funds from unsuspecting users. Where most cryptocurrency news remains firmly out of the public eye, these massive exchange hacks often breach into the general public’s view. The average person doesn’t hear about a bank adopting blockchain in their back end – but they will hear about the multimillion dollar exchange hack.
Start-up cryptocurrency Incodium (INCO) offers a potential mitigating factor to this. At their core, they function as cryptocurrency insurance. Users that are engaged in the Incodium ecosystem become eligible for compensation in the event of a cryptocurrency hack. The idea is relatively simple, and brings a function of the real world into the cryptocurrency market. If users are protected from massive losses due to theft, they may be more willing to engage in the market as a whole.
The Incodium System
The Incodium system depends heavily on the INCO Wallet itself. Boasting advanced security techniques, the Incodium Wallet holds INCO tokens – as well as most ERC-20 compliant tokens. So long as the user maintains a balance of INCO tokens, they are eligible for loss compensation if they are the victim of an exchange hack. The entire process is automated via smart contract and only requires that the exchange verify a hack took place.
This is leaps and bounds beyond previous compensation systems. While compensation was not provided in all exchange hacks, many chose to reimburse their users to preserve good will. These compensation events are always manual, slow and cumbersome. Incodium’s system would streamline the process and significantly mitigate the damage done by these hacks.
Stabilizing the Cryptocurrency Industry
The cryptocurrency industry is in a state of severe flux. The ICO explosion of early 2018, coupled with the complete collapse of prices across the board, created an environment of distrust and severe caution. If some semblance of safety could be regained, it could spark renewed investment. If INCO can help build the safety net that mitigates cryptocurrency’s inherent volatility, it could see great success in the future.
Article By: Adam Stone