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Cybersecurity threats in cryptocurrencies

Cryptocurrencies is a hot and trending topic. There have been various research and experiments done in cryptocurrencies and this is still evolving. Bitcoin is one of the most popular cryptocurrency available in the market, and there are others following such as Ethereum, Litecoin and etc.

Such craze for cryptocurrencies has seen a drastic increase in the number of crypto investors. Everything around cryptocurrency is evolving and is still in the process of being streamlined. This is one of the key factors that exposes cryptocurrencies to several forms of hacks. Cryptocurrencies can be exposed to high profile hacks and are one of the concerns for most investors.

Being aware of the kinds of attacks that are prevalent in the crypto space will allow cryptocurrency investors to be more vigilant while exchanging in the cryptocurrency space. Below are listed some of the common cybersecurity threats that are prevalent in cryptocurrencies.

  1. Cryptocurrency accounts: Cryptocurrency accounts are accessible and secured via private key. Digital currency trading is secured with complex passwords. However, most users tend to store these keys in their PC to make it easily accessible.

    Making such credentials accessible within your PC lets hackers easily access these credentials, in case a hacker gains access to your PC. Using such stolen credentials, a hacker can gain access to your crypto accounts and mishandle all your investments.

    A point to note is that only the crypto investor is responsible for the safety of the accounts. Such hacks can sweep away all your crypto investments and hence should be considered as a high risk.

  2. Cryptocurrency Exchanges: Most digital currency users are aware that cryptocurrencies can be extremely risky, yet the thrill and excitement to try some new forms of investment attracts several cryptocurrency investors. There are several digital currencies available in the market and this is not governed by any single entity. Digital currencies are completely decentralized.

    With no appropriate monitoring body, its difficult to sometimes track digital currency trading. Cryptocurrency exchanges are available where digital currencies can be purchased and traded, much like a stock market. However, these are different from conventional banking which is completely regulated by the government.

    Its no secret that in the past several digital currency exchanges have hit the headlines for several security breaches. Popular exchanges such as Bithub and Coincheck have also been victims of crypto hacks where several millions of coins have been stolen.

    Cryptocurrency exchanges are not monitored entities and hence do not have any specific requirement for security audits. This makes it easily susceptible to newer kinds of attacks. Such exchanges are still trying to shield from the most common forms of attacks. Firstly, it’s hard to check the validity of a listed exchange and it's not uncommon that many investors have been victims of fake exchanges. Secondly, since its unregulated any well-known exchange can also be susceptible to several mind-boggling attacks.

  3. Wallets: A crypto wallet, is the first place to keep your crypto secure. To do so, you need to make your wallets secure and inaccessible to others. Use well-rated crypto wallets that provide added layer of security.

    Ensure not to store an electronic copy of credentials as this can make it simple for hackers to access in case of a security breach. While working on cryptocurrencies avoid using public Wi-Fi as this puts you at higher risk.

  4. Contingency funds in exchange: Crypto exchanges in the past have been exposed to several hacks and there is no guarantee on what would be in store for the future. However, as a simple precaution you can have a contingency plan.

    Most popular exchanges store cryptocurrency in reserve that gets redistributed to investors in case of a hack. This means in case your currencies are stolen, then you would still be able to get back your currency.

  5. Exchanges Insurance: A lot of popular exchange platforms have started insurance against hacks. This ensures your digital currencies are better secured and are at par with fiat currencies. While choosing any exchange, you would have to check if such hack protection is available with the exchange platform.
  6. Fake Cryptocurrencies: Investing in a fake cryptocurrency can be a nightmare. This can be in the form of an imposter providing a fake website or a social media Ad campaign. There are multiple ways in which users get trapped in cryptocurrency scam.

Crypto currencies are speculative and risky investments. It is best to know all the facts before working on any digital currency. Ensure to make security your top priority while dealing with cryptocurrencies. Work with investor advisor to get proper consultation and take informed decisions while investing in crypto space.

Conclusions

While cryptocurrency investments look alluring, though the threats they carry are real. Cryptocurrencies have been a trending topic for some time now and has gained huge media limelight. The excitement to know such innovation has opened gates for several curious investors. However, before stepping into the cryptocurrency investment it's advisable to weigh the risks. Such hacks can have a huge impact and can be financially devastating unless investors take appropriate precautions. Failure to identify risks and secure digital currencies can have major repercussions. Equip yourself with enough knowledge about cryptocurrencies, exchanges, wallets, and risks before choosing to invest in cryptocurrencies.

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