Lightning Network – An Alternative to the Bancor Exchange? Charlie Lee Thinks So
After undergoing an attack which resulted in the loss of $12 million, the Bancor cryptocurrency trading platform is set to resume operations. During the security breach, the exchange lost several digital currencies, including Ethereum, Pundi X and its native BNT token. Besides the attack, the platform was previously criticized for proclaiming itself as decentralized, while similar services are usually centralized.
Nonetheless, Bancor has promised to publicize a detailed report on attacks, including how the funds were stolen. The statement, which appeared on the company’s social media pages, stressed that client wallets’ were not breached during the attack. Instead, the hackers stole the funds from the BNT’s connector balance, which is essentially a reserve account. Also, the cybercriminals stole additional funds from smart contracts since the connector has access to the main network.
In another instance, a suspicious party tried to exchange BNT into Bitcoin using Changelly, a platform that facilitates the instant conversion of digital assets. However, Bancor and Changelly thwarted this attempt by freezing the malicious smart contract. While the freezing of the contracts averted additional losses, the action itself has drawn negative response from crypto enthusiast, most of who argue that the platform is too imposing. Furthermore, it is uncharacteristic of ‘decentralized’ platforms to deploy such severe actions without involving all stakeholders.
Responding to the concerns of the crypto community, Bancor stated that the freezing powers were a part of a 3-year pilot phase during which the platform safeguards the interests of its clients. Specifically, the company asserted that the involved BNT tokens were stolen, and they were thereby impelled to deploy countermeasures to reduce the extent of the loss.
As the debate on whether exchange platforms can be decentralized continues, Litecoin founder Charlie Lee believes that the Lightning Network (LN) is the closest thing to this dream. Charlie stated that users who are currently running LN on both Bitcoin and Litecoin can act as makers who are earning a spread. On the other hand, the other users on the network can act as takers and atomically exchange either Litecoin or Bitcoin with the maker nodes on the LN.