As soon as financial markets started to use computers, the chase began, which continues to nowadays. We are talking about developers of security systems that clash with attackers who try their best to come up with more and more sophisticated ways of hacking into these security systems. Historically, the “attacking” side is ahead of the “defense” one due to the fact that the drive for development in this case is specifically the pursuit for hacking. And the opposing side only tries to repair the holes, which emerge as a result of numerous attempts at attack.
Weak points of cryptocurrency exchanges
The current cryptocurrency exchanges, which go under the threat of hacking due to the use of technologies and systems that do not meet current market challenges, are no exception. At the moment, crypto exchanges have an array of flaws, which include: the speed of transactions, the security level, and as a result, restrictions for specific users of exchange services. The overwhelming majority of current crypto exchanges provide an opportunity to conduct an average of about 500 thousand operations per minute, which would be quite enough when using manual trading with tiny volumes. For comparison, the number of executed trades on classical exchanges is much higher, within 5-6 million transactions per minute. This proves that institutional clients of classic trading platforms have the opportunity to use their strategic plans on markets and without technical limitations. And one of the conditions for the entry of large "players" into the cryptocurrency exchange is the speed of executing the orders. Unlike the first-generation trading platforms, the cryptocurrency exchange “KYRREX” uses advanced technologies and has developed algorithms that make it possible to keep up with classic exchanges in the number of executed transactions per minute.
Trading platform security
Another important condition for the institutional players to enter the cryptocurrency market is the above-mentioned security level of trading platforms. Current crypto exchanges use APIs to enable automated trading. To make it clear, API is nothing more than a direct channel that allows you to connect to the Holy of Holies - the core of the exchange, where the operations and accounting are performed. This is done for the purpose of increasing the speed of interaction between the core and the user, but at the same time, it opens up broad opportunities for hackers.
To protect the core of the Exchange, KYRREX uses a complicated system of processes running between the user interface and the core. Thus, KYRREX separates its operating processes into different parts, which is also another link in KYRREX security chain. Alongside existing security methods, KYRREX uses a special type of connection which helps to speed up the process of transmitting data between all parts of the KYRREX system. The same principle is used within the trading platform and other applications, which stands against DDOS attacks. The only object to be attacked is the web interface, but there will be only one channel which would be overloaded in this case. This would block the site, but will not affect the work of the Exchange itself, and certainly not affect the core performance.
Now we are at the stage of developing the second generation of cryptocurrency exchanges. This fact is being proved by radically modified approaches to solving a number of issues. Modern crypto exchanges have become pioneers in this industry and the whole system, built on their shoulders, will become competing with the classic market, but, nevertheless, their life cycle slowly comes to an end. They should be replaced by crypto exchanges of a new generation which have learned all the lessons of their predecessors and will continue developing the industry onto a different, higher level.