As most of money in the world is digital anyways, Why can’t people fake transactions to a Bank account or just add one or two zeros to the balance? What makes online banking so safe that this doesnt work?
Most of even well guarded things have been hacked in the past, so i would imagine it’s at least possible?
In: Technology
Money is not fully digital yet. For most currencies, banks are required to have a fraction of all their deposits in physical currency, and the central bank strictly controls the ratio of “virtual” deposits and the actual physical currency deposits. So the bank is always required to know how much physical money they have and the total virtual money in the accounts. If the value deviates too much, the ratio will fall below the minimum required, which will trigger all kinds of alarms and they will track down the source of the problem.
That is starting to change, and major central banks are developing and deploying “real” digital currency, and they are a kind of cryptocurrency. I don’t know the specifics on the design of digital dollar, but if they borrow from the current existing cryptocurrencies, they will have strictly verifiable transactions via cryptography, and the database of all transactions that ever happened with the currency will be replicated via multiple independent agents, who can verify all the transactions independently. This way, by just knowing the public keys of the Fed (which, as the name implies, would be public knowledge), anyone with the digital dollar transactions database would be able to verify every issuance and transfer, and verify the total is unchanged.
So, the only way for a hacker to fool this system is fooling every single independent validator of the database (which I imagine would be every major bank) at the same time, and every new validator that enters the system in the future (otherwise they would raise the alarm when they find some inconsistency in the past transactions). So, it would be pretty much impossible…
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