CryptoInvesting

Cryptocurrencies: Knowing the cyber-security risks in it

Back in the late 90s, the world saw the phenomenon called the dot-com-boom. This movement eventually turned out to be a dot-com-bubble. This bubble was the illusion of a sound investment. Every tech company and entrepreneur was thinking of making innovation on the internet. Trying to ride the way, and be the next best thing. When this bubble finally popped, there was more unemployment and lost investments than the industry had fathomed. This effect is slowly seeping into the crypto work too. The crash of 2018 in the crypto market was one of the reasons many thought the bubble did exist. A 68 percent fall in the costs was alarming to the bitcoin market, but this also had a positive effect.

With each market drop, there are new measures taken to make sure it does not happen again. These innovations are the reason; we consider Bitcoins and other cryptocurrencies a worthwhile investment even today.  

Growth of Cryptocurrencies

Crypto has never stopped growing in the conventional sense. Despite the advantages and disadvantages of cryptocurrencies, there is always a new tech coming out to nurture the further enhancement of the field. It’s so popular that there is a new post on social media every three seconds about Bitcoins. But there is no denying that some of these posts are about the discrepancies in the currency. The risks are many, but let’s first understand what the reason for these risks is

●       Scalability

Although the bitcoin market is aiming to replace conventional currency, there is no trace of it in the present of the near future. Although they are accessible and many are trying to invest in them, there are very few channels that accept these currencies as a valid payment. This creates a simple problem of money that cannot be used, leading for them to remain as investments and do not come “currency.” Unlike in the case of credit card payment, there is always going to be the tech to support payments.

●       Price regulation

The crypto market is a decentralized one. So this means there is no governing authority on them. This lack of rules also works as a disadvantage. Since there is no authority on the control and distribution of these “coins.” This also means the price volatility cannot be determined.

●       Security risks

It’s always hard to believe in an industry that becomes popular overnight. This has been the case for generations. The added risks come from the fact that it’s an online exchange platform; this opened the floor to many cybersecurity risks. Since the lack of mining regulations or exchange policies are hard to govern on the internet, they further create threats. 

Understanding the Risks in Cryptocurrencies

The account or the wallet is the primary platform for the purchase/selling and managing of crypto. The way they work is by the use of registration keys and passcodes. A simple key is the only way to access these, and this leads to a lot of risks. If the key is compromised or duplicated, all the funds can get drained, and there is no way to track it. A hacker can easily access the computer of a currency owner and make changes to the account. Since there are no banks or security departments, it’s almost impossible to follow up on these.

Crypto exchange is one of the high points of vulnerability. There are plenty of platforms out there that help you sell your currency when they hit desired high-points. Since the industry is still new, there is no way to trust which platforms can be trusted. Greed will always be an underlying factor. This desire is the reason why users pledge their support to phony platforms. The USI tech scam was a huge eye-opener. Customers were promised a platform to track and sell coins. But, the company fled the funds and is not yet traced. Another platform, CoinCheck, has a system breach, and over $550 million in cryptocurrency was hacked.

A lot of people who invest in this domain are very unsure about how it works. The investments are made purely on a whim, or with the motive of reaping benefits. And users cannot be blamed for this. Even after hours of reading, it’s tough for a non-coder to understand the complexities of Blockchain and crypto. They are not as simple as the stock market or the national currency. The simple lack of understanding is one of the biggest reasons for its threats.

How to protect the crypto from risks?

Make sure your crypto is not saved on a cloud or an online wallet. This makes it more accessible to threats and hackers. There is a lot of hardware developed for the protected storage of crypto. These USB devices have an additional button on their surface. Until the button is pressed, the currency is not granted a second level of validation. This layer also makes sure no hacker can obtain your details using keystroke recordings.

It’s essential to know what you are investing your hard-earned money into. Don’t allow the impulsive need to make money come in the way of losing it all. The full understanding of the crypto and blockchain networks is essential before making money from them. There is no central organization to blame if things go south, so make sure to not land in that position later.

Talks to at least two people who have invested in the field before you put money into it. This consultation does not mean sharing your financial status or investment ideas. Talking to a person can give you more real-life information; that you cannot get from reading articles online.

Do not surf the web for crypto details with your personal information. A lot of these websites used are a playground for malware. These are malicious viruses or trojans that can enter your system and steal your data and access your crypto account. Make sure not to open any emails or enter your email ID on any websites that seem suspicious or promise “fast growth of the currency.”

  • Only use trusted wallets.

Make sure the wallets that store your currency has a lot of reviews and recognition online. It also helps if some major financial brands back them. This level of trust can make all the difference to avoid another CoinCheck fiasco. 

Is the investment worth it when there are cyber risks?

The risks are many, but so is the payback. Which financial sector does not have chances? That’s the beauty of trading and new sources of money. For sure, the cyber risks are many, and there will always be new ways to find a way around them for hackers. This currency is still a new industry, and there are very few players working in making the sector reliable. But in the years to come, there will be many invocations that will make crypto just as safe as credit card payments. Or even better.

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