Highly profitable, very volitile, and accessable to hacks, scams, phishing schemes, and money laundering, this highly contravertial financial product needs the ultimate in decentralized and centralized internet security. As with all new products online, new security systems need to be developed.
Game Changing, Revolutionary Technology
It is one thing to keep up with new products. However, cryptocurrency and its underlying technology is a game changer! Logically cryptocurrency would need revolutionary security systems. Except the point of a truly decentralized internet is that it is a “trustless” system. In other words mathematics takes care of the security in theory.
So how come cryptocurrency is rife with crime? Great question! Let us strengthen this, if security is built into the technology itself, then it is intrinsically secure and security measures are superfluous. So how how can any crime exist?
Darknet
First the easiest to explain. When an anonymous system opened for public use, crime was rife. Anonymity made it possible for criminals to launder money, sell illegal goods and services, and fund terror.
Police anti-crime units were quick to respond. They started to develop highly successful technological and human tactics to bring these criminals down. Silkroad is the most famous example. Combating crime seems to taken care of systematically and comprehensively.
Rampant Scams, Hacks, and Phishing Schemes
Confused? So, why are there all of these stories about scams, hacks, and phishing schemes in cryptocurrency?
Simple, because there is seemingly intrinsic security embedded in cryptocurrency, the vulnerable place for attack then is the user’s vulnerability and points of connection with the centralized internet.
Points of Contact with the Centralized Internet
Again, the let us start with the more simple issue. There are 2 parts to this answer.
First, after Bitcoin was created many other cryptocurrencies were developed, called altcoins (alternative coins). Ether, which runs on Ethereum, was Bitcoin’s first competitor. The basic difference between Bitcoin and altcoins is that Bicoin is completely decentralized. Altcoins have a centralized point from where they are created and maintained. This makes them vulnerable to attacks. In order to address this centralization issue, more altcoins are decentralizing or starting off decentralized. This is addressing security issues. It can be argued that exchanges are vulnerable because they have to be centralized.
Second, in order to buy any cryptocurrency, you have to have an interface point where fiat payment meets the cryptocurrency being bought. The same process applies in reverse when you sell your cryptocurrency in order to convert it back to fiat currency. Again in both cases there is a centralized point, but this one might be unavoidable. Therefore there might be an unsolvable central point. Note: exchanging and/or trading between cryptocurrencies can be done on a decentralized system as can using cryptocurrency to pay for goods and services online. Therefore it is as secure as the decentralized system itself.
User Vulnerability
Now for the most complex cause, user vulnerability. Security is only as good as the user. Even top professional techies can fall for scams. This is because user are human and sometimes make mistakes.
Education is a key factor. The more educated you are in how to secure your cryptocurrencies, the more likely the cryptocurrency you own will be secure. There a few basic rules to learn and continuously implement. Therefore you have to do research and know and understand how to keep yourself as secure as possible.
You need to keep your private key, private always! Never give it to anyone for any reason. Although you do need to record it somewhere safe and offline for you to use when necessary and for those who will inherit your investment. Then you have to be knowledgeable about how to protect yourself from all sorts of scams and phishing attacks by doing online research and continually keeping up-to-date with your education in this area. Cryptocurrency is always growing, so updating your knowledge is crucial.
Conclusion
Even though cryptocurrency and its technology seem to be intrinsically secure, it is essential to empower yourself with knowledge in the area of cryptosecurity. This is because a major vulnerability point is the user, him- or her-self. Constant education is needed because this is a young and growing revolutionary technology, so there is much to be learned even by the experts.
