Cybersecurity in Cryptocurrency: Risks to Be Considered

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Click to learn more about author Ben Hartwig.

Blockchain has grown rapidly in recent years, but cryptocurrency is not immune to security attacks. There are still cybersecurity risks to be aware of.

Some cryptocurrencies have already been the victim of ransomware attacks and other security breaches by hackers. ZenCash and Ethereum Classic have both lost millions of dollars to blockchain security issues. 

Because of the way blockchain works, the data on the chain is potentially viewable by all the users. This can lead to both security and privacy issues.

Why Cryptocurrency Is Considered a Safe Haven for Hackers

Bitcoin is big business. Although in theory, blockchain technology is very secure, it is estimated that 33% of bitcoin trading platforms have been hacked.

The problem of security comes from the use of keys and the transactions on the blockchain. A key is a set of letters and numbers that is the unique correspondence for your bitcoin. It’s safe and secure, but once you put it into a bitcoin wallet or on a trading platform then the security of that platform becomes vital. If someone accesses the key, the currency can be taken.

The average cost of a data breach for bitcoin and cryptocurrency isn’t known exactly, but the Wall Street Journal reported that $1.7 billion in cryptocurrency has been stolen in recent years.

Hackers can target this security flaw and use it as a method to steal your money.

The Biggest Scam in Crypto World

One of the biggest scams in the history of cryptocurrency didn’t come in the form of hacking or a data breach. The whole currency system of One Coin was a scam. It was a multi-level marketing scam that drew people in with promises of big returns but unfortunately ended up costing people a lot of money. This is proof that hacking is not the only security risk for crypto. There are a number of cautionary tales.

Major Cyber Threats to Cryptocurrencies

Cyber threats to cryptocurrencies are similar to those in other types of business. You need to treat your accounts on these platforms with a lot of caution.

Account takeovers can allow people to steal your private key, which is the main way in which they can take your money.

The untraceable nature of some of the bitcoin or crypto activity means that for hackers and scammers, it is an ideal target. You can be sure that there are some huge hacking groups working on taking down individual accounts as well as whole crypto platforms.

How to Avoid These Cyber Scams

Be wary of new platforms. This is a lesson learned from One Coin. Some of the systems are fraudulent, and this one didn’t even use blockchain. It was one big scam. Do your research before investing in a cryptocurrency.

Pay attention to any emails you get regarding bitcoin or crypto balances. We know that bitcoin scams are rife. They present a way for scammers to send spam messages that can lead to a ransomware attack. If you get an email talking about your cryptocurrency balance going up, or needing to reset your details, make sure you verify the identity.

Your private key should be seen as sacred. This is the main thing that can be compromised and lead to you losing a whole lot of money. The way bitcoin and other cryptocurrencies work means that your key is something of a vulnerability if it falls into someone else’s hands.

You should always practice good safety on any device where you access your wallet or on any marketplace. Not doing so is a way to potentially leave the door open for an account takeover. Malware can be used to take your money, and there may be nothing you can do about it once that cash has gone.

Take-Home Message

Generally speaking, cryptocurrency is pretty safe. The clever, decentralized system is growing at a rapid rate, and many of the currencies on the market are becoming mainstream. You can pay for your coffee with bitcoin in some parts of the world. However, just like you would exercise caution with your online banking account, you should make sure that you don’t let any potentially exposing data get compromised.

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