It is known that cryptocurrency is a digital currency based on blockchain technology. Blockchain technology is a digital ledger that stores and records all crypto transactions. In 2009, after the launch of Bitcoin, cryptocurrencies started to explode in the financial market, and since then, the growth and revolution are making waves in the market. Moreover, cryptocurrency has deepened its roots in the world this way that its popularity seems to stay here forever. Read more about Difference Between Bitcoin and ETH.
More About Crypto
Cryptocurrencies are digital or virtual currencies secured by a complex mathematical puzzle known as cryptography. These currencies depend on blockchains are open-distributed ledger that stores all the transactions safely in a code.
To store cryptocurrencies, there are wallets just like the ones we keep for storing fiat currency. The only difference is these wallets are digital. There are two types of digital wallets, cold and hot wallets, to store crypto assets, and they can be either on the website, computer, or hard drive.
Bitcoin was the first ever cryptocurrency to launch, and after that, some other alternative cryptocurrencies were launched, like Litecoin, Dogecoin, Ethereum, Cardano, Ripple, etc.
Cyber Security And Cryptocurrency
People know cryptocurrency is the future of finance, but investing in these digital assets without understanding the cyber security difficulties can lead to so much suffering and trouble. Below given are some of the most common cyber security concerns linked with cryptocurrency investments that every crypto enthusiast and potential investor should be well aware of.
Phishing is a special technique hackers use to imitate any credible firm or company for example, a crypto trading platform like Bitcoin Trading Software. This technique can be as simple as just clicking on some website or getting hands on their login information. Hackers use this technique to get hold of users so that they can hand over their digital assets or currencies.
Unauthentic Trading Platforms
As cryptocurrency is still in its beginner’s era, new trading and exchange platforms are emerging to gain the trust of potential investors. But, not all platforms and websites are trustworthy.
The One Coin case is in front of our eyes. This platform was later found to be a multi-level marketing rip-off. If you think that just a hack or leakage of data is the only threat linked to cryptocurrency, this might be the right time to change your thoughts. Fraud can happen just in front of your eyes, and you would not know.
Some crypto investors still use third-party tools or software to manage their digital assets or currencies in some cases. Here we have an example for you; some investors use crypto tax reporting services that expose them to extra cyber security threats.
Security Issues of Crypto Accounts
Many crypto users access their digital assets or cryptocurrencies using a private key, a complex password consisting of a code. Most users keep their private keys on their personal computers, which is quite harmful. If hackers get access to your PCs, they can easily invade your documents and log into your digital assets account using that private key.
Though cryptocurrency uses advanced security systems and mechanisms, if the private key is stolen, there is no way to recover it again. Due to this reason, cryptocurrency investment is riskier than any other investment.
Unregulated Crypto Exchanges
Most cryptocurrencies are decentralized, meaning no agency, institution, establishment, authority, or governing body is responsible for their production, regulation, and circulation. Though some people believe that having no specific authority or governing body to regulate the currency is advantageous, on the other hand, this decentralization comes with some drawbacks.
As cryptocurrency is still a new concept to many people, it can negatively impact people or potential investors. Indeed, cryptocurrency, crypto exchange, blockchain technology, and consensus mechanisms are quite perplexing by their nature. Sometimes, investors find it super difficult to understand this technology.
Unlike all physical assets and currencies, cryptocurrencies occur digitally over the internet. Due to this reason, it becomes more like to attract hackers, making it even riskier for investors.
Cybersecurity is an integral area for cryptocurrencies where the developers and owners must work majorly. Proper security protocols are important to keep our crypto assets protected from any type of cyber-attacks. However, being extra alert and vigilant while using applications and websites is a must.