How Safe is Cryptocurrency?
Cryptocurrency is moving from the realm of high-tech enthusiasts and into the mainstream market. A new report by Kaspersky Lab found that one-in-ten people (13%) have now used crypto to buy something. On the other hand, cybercriminals are also seizing this trend by targeting cryptocurrency exchanges and altering old threats to hack investors.
The rise in crypto hacks puts people at a higher risk of losing their savings, which are often stored in unprotected ways, especially now that hackers are figuring out complex methods to access these funds. However, the number of businesses accepting cryptocurrency as a payment method is growing, from retailers to food outlets alike. Prices are going down, and even major sports teams are also working with crypto-exchanges. Nevertheless, as people express interest in using cryptocurrency to invest and purchase things with, their money is vulnerable to being stolen from cryptocurrency wallets, insecure exchanges and scam Initial Coin Offerings (ICOs).
In fact, up to $530 million worth of digital tokens has been stolen in high profile incidents.
Hackers have many ways of stealing funds from crypto wallets, cryptocurrency exchanges, and ICOs.
One High profile case, took place when 120 000 bitcoins were stolen from segregated customer wallets on Bitfinex in 2015. Another was when Coincheck got hacked for $530 million last year. These incidents highlight the lack of security in these exchanges and how easy it is for cybercriminals to access live networks and cause extensive damage that cannot be fixed.
If a hacker successfully steals all the money in a cryptocurrency exchange, then it merely closes, and investors cannot recover their losses.
ICOs are a particular area of risk since most people setting them up do not have any background or experience in cybersecurity. Thus, funds are left unprotected, and the people in charge don’t know how to respond effectively if a hack takes place. As of now, the cryptocurrency market still has no regulation in place, and there are no risk assessment mechanisms either.
The Head of Verification, Growth Center at Kaspersky Lab, Vitaly Mzokov, said, that in spite of a drop in cryptocurrency prices, consumers still have a strong desire for digital transactions. Kaspersky Lab consumer research discovered that 13% of people had used cryptocurrency as a payment method, which was a surprising result. Yet, there are also real dangers that come with online exchanges as they are still nascent. If funds are not secure, consumers could face devastating financial consequences.
Learn more on Asgardia.Space
