Got you. But human greed and social engineering do not follow mathematical models.
If you create one, it will have big sum and human greed will always like to take chance to get access on it.
But if you create 100 than the greed will be 100 time less and people will not like to risk their jobs/career for that small amount.
Yes, thought so too. If all funds are aggregated into a single wallet, then it makes it a very attractive target. Andreas had this video where he discussed why hackers go after exchanges. Couldn't locate it but would share if found. Basically, he said that hackers approach this in terms of reward / effort ratio. The key thing he mentioned is that security is not scalable.
So if random user X holds $900 in his wallet and uses moderate security that requires an effort of 2 to crack, then the ratio is 50.
On the other hand in exchanges, they hold say $900 million. But the security that an exchange offers cannot be a million times stronger. Consequently, the reward / effort ratio for hackers is actually higher.
Which goes back to the original question, why don't exchanges split up their funds into wallets then?
Somehow I believe in most of hacking it is always inside job.
Popped it into Google. Poof! You are right.
https://www.benzinga.com/pressreleases/17/11/p10792005/most-cyber-attacks-are-inside-jobs