There is no denying how cryptocurrency and cybersecurity have taken the world by storm. Over the last few years since its inception in 2008, more and more people and organizations have adopted this form of a digital asset. As of 2021, 300 million people, or almost 4% of the world’s entire population, own cryptocurrency. In the US, 2300 companies and organizations accept crypto as a valid form of payment.
The popularity of cryptocurrency is expected to continue rising over the next few years. Nevertheless, this innovation is still in its infancy. There are plenty of things about crypto that remains in a grey area. It is unsurprising how cryptocurrency has become a massive target for hackers and other malicious individuals.
If your company is considering investing in crypto or accepting this currency as a form of payment, it pays to understand what the innovation is all about. This article explores the cryptocurrency and cybersecurity risks of transacting through this digital asset.
What is Cryptocurrency?
Before anything else, it is essential to note that there isn’t one singular form of cryptocurrency. Cryptocurrencies are different forms of payment that consumers and companies can use to purchase goods and services. While the technology is a lot more complex, they are essentially similar to casino tokens or county fair chits. The exchange of legal tender into cryptocurrencies is required to use these assets for trades and exchanges.
At the heart of Cryptocurrency is blockchain technology. Blockchain, otherwise known as Distributed Ledger Technology, is essentially a ledger that is challenging or impossible to change or hack. This ledger is distributed amongst all participants and can be viewed simultaneously in real-time.
Are Cryptocurrencies Legal?
The legality of cryptocurrencies depends on two things: your location and your intended transaction. Currently, only one country, El Salvador, considers cryptocurrency as legal tender.
Most nations are friendly towards using this innovation as a form of payment. Over 2000 companies accept certain cryptocurrencies in trade and purchase in the US alone. Consequently, countries like China ban the use of cryptocurrency within their borders.
What are the Benefits of Investing in Cryptocurrency?
There seems to be a gold rush in acquiring and trading cryptocurrencies in the last few years. Even after a decade since its inception, the world of crypto can still be considered the wild west. Plenty has struck gold and thus the popularity of this digital asset. That said, cryptocurrency and blockchain technology can be challenging to understand. To effectively explore the market and gain high returns, it is crucial to partner with experts who can guide you and your company towards making intelligent investments.
Cryptocurrency and Cybersecurity: The Risks
It can be easy to be swept away by the fanfare around cryptocurrency. This new form of digital currency seems like an easy and straightforward way to invest legal tender and grow it exponentially for those uninitiated. Nevertheless, it is vital for companies and individuals to understand that crypto can be a breeding ground for malicious activities. Transacting through cryptocurrency carries a few risks:
- Account Key Protection
Cryptocurrency wallets can be accessed through a private key containing a complex system of passwords. This code provides users access to a digital account. Without the key, it would be near impossible to hack into a specific individual’s or organization’s wallet. As with most risks, the issue with cryptocurrency keys is how people store this sensitive information. Most users store their passwords on their devices just like any other file. This is highly risky because while wallets are impenetrable, PCs, cellphones, and tablets aren’t.
- Unregulated Exchanges and Trade
As mentioned earlier, only one country recognizes the most popular form of crypto, Bitcoin, as legal tender. As such, most jurisdictions have hazy regulations when it comes to the use and trade of these digital assets. Likewise, the decentralized nature of cryptocurrency means that there is no governing body that oversees the movement of digital currencies. Because of the lack of administrators, there are no audits, assessments, or controls that protect users in an instance of an attack.
- Limited Knowledge on Blockchain
The concept of blockchain technology can be difficult to understand. The uncertainty and instability of this form of assets can make for very volatile investments. It is nearly impossible to be careful and remain a moderate and risk-averse investor with cryptocurrency.
Cryptocurrency and Cybersecurity: How to Protect Your Assets from Hackers
The cybersecurity risks surrounding cryptocurrency are concerning. Organizations and individuals looking to dabble into crypto should be wary of these risks in order to remain ahead. Thankfully, there are several simple ways to ensure that your assets are protected:
- Be Protective of Your Security Keys
Private keys are physical hardware authentication devices that crypto owners carry with them at all times. These keys are the only thing keeping assets from the malicious hands of hackers. It is crucial to be protective of these keys to prevent any successful breaches. While it is almost near impossible for hackers to stalk a person and steal their key, it isn’t impossible. It is best to refrain from saving this information from any online database.
- Be Diligent
Not all cryptocurrencies are created equal. Before investing your company’s assets in a specific currency, it is vital to do your research. Do not take information at face value. As said earlier, it can be challenging to stay away from the hype. But your investment moves should always be grounded on tangible data.
- Use Multifactor Authentication
When it comes to cryptocurrency, you can never be too safe. A multifactor authentication protocol for your security keys isn’t a surefire way to protect your assets. However, it is an extra layer of defense.
Generally, owning cryptocurrency is a safe bet. With blockchain technology at its core, the decentralized characteristic of this currency provides it with a significant layer of protection. Nevertheless, it is still best to err on the side of safety.
To take full advantage of cryptocurrency without the significant risks, it is a good idea to partner with cybersecurity experts to enhance your security protocols. SecureBrain offers cybersecurity solutions that would fit every need. Contact us today to learn more about our products and services.