MT Gox was an exchange that went bankrupt way back in 2011 - ten years ago - a lifetime ago in technology terms. The coins were stolen from a hacked wallet held by the exchange - and the exchange itself was hacked to facilitate false transactions. The blockchain and electronic ledger itself was never hacked. The exchange was obviously using a software wallet that could be hacked.
That said, the exchanges even today need improvement. This is where regulation would help - much like the SEC regulates the market exchanges today that are also private sector entities.
It’s not much different than if someone steals your actual physical wallet today - if that happens then you’ll lose your money - whether fiat currency or credit cards or cryptocurrency. If you don’t secure your money properly, it’s likely to be stolen.
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But the point of block chain is an unhackable audit trail. So any stolen property should have been easily identified. It was not. That is why I have no confidence in the cryptocurrency concept. It lacks security. What good is an audit trail that isn't used?
To use your physical wallet example. If every bit of money in it had a unique serial number (and it does), and every time a piece of money was automatically checked when it was exchanged (which it isn't - today); then what good would it do the person who stole it? The money couldn't be used for anything but starting a fire. Cryptocurrencies are supposed to work that way, but they don't.
But in the end, security aside, cryptocurrencies only have value because people <believe> they have value. They have no other utility otherwise. You can't do anything with them, they have no physical existence. You can at least burn paper money for warmth. Even tulips has uses. . .