Keep Your Bitcoins Safe: All You Need to Know About Crypto-Cyberthreats.
Cryptocurrencies are an increasingly popular store of value. Banks and governments are adopting a more liberal stance to cryptocurrency adoption and use for various economic activities. Some assets prove better than others in hedging against unforeseen circumstances. Gold and silver are two precious metals that have played this role excellently for a long time. Today, people are tipping Bitcoin to play this role effectively.
However, there remain many questions around Bitcoin’s capacity to fulfill this role.
Bitcoin: What It Is and Why People Say It as a Store of Value
Bitcoin is the first and most popular cryptocurrency. It now has a growing reputation as a store of value. While that remains debatable, we now acknowledge that Bitcoin offers an efficient way to transfer money over the internet.
A decentralized network controls Bitcoin using transparent rules to make it a viable alternative to fiat money that banks control and regulate.
Any means of exchange or currency is a store of value if it’s usable. In other words, it can maintain its value long enough not to depreciate. Commodities and precious metals have been popular payment methods throughout history because people perceive them to have a relatively stable value.
Besides being a means of exchange, Bitcoin has several cardinal characteristics that ensure that people trust its potential as a reliable store of value. These characteristics include:
Bitcoin is scarce in supply, and scarcity is necessary to determine the value of any currency. Too much supply of currencies leads to a spike in prices and economic collapse. Economists call this phenomenon “inflation.”
Bitcoin is scarce, but it’s also growing in supply, ensuring that it can avoid another economic problem where there’s too little in supply.
Bitcoin is divisible and caters well to all types of goods and services. It is also flexible, reflecting the value of various goods and services.
Bitcoin has utility, the quality of a currency to serve as a bridge of exchange for goods and services. There are also digital channels that make it easy to move Bitcoin from one individual or institution to another. Utility was probably the most prominent case against commodities and precious metals.
Bitcoin is easy to transfer peer-to-peer or through exchanges.
These qualities ensure that Bitcoin grows in value and that people everywhere consider it a reliable way to keep value. However, Bitcoin is prone to wild swings (volatility) even though its present high value offsets its many drops.
The Role of Government & Your Money
Societies have evolved to the point where governments are primarily responsible for shaping monetary policy. So-called “fiat money” results from governments printing money to curb the scarcity that commodities often suffer.
Many governments operate with a fixed amount of inflation to peg the fiat currency value and keep it artificially low. The US rate has historically been 2%. Bitcoin is different; it has a flexible issuance rate that changes over time.
Fiat currencies are suitable for storing wealth long-term, but having more units available in the economic system diminishes your purchasing power.
What Makes Bitcoin Prone to Cybercrime? The Core Idea Behind Bitcoin
Nontraditional currencies have been in use in cybercrime campaigns for several years, especially for extortion purposes. Bitcoin provided immense opportunities for criminal elements to deliver more brazen attacks with higher stakes.
The criminals reason that the victims would eventually be able to pay it. Do you now see why countless emails, websites, and mobile apps have infected users with ransomware over the last few years?
Bitcoin relies on the blockchain. Data transactions within the blockchain are random, and there is strong encryption to back this up. This architecture implies that it’s impossible to duplicate the blocks or the chain or even infiltrate them with malware or other means.
However, if the information on one end of the chain is incorrect or fraudulent, the other party is in no position to override it. This flaw is in sharp contrast with card transactions and wire transfers, which are easy to stop if things appear suspicious.
Criminals can take advantage of the excitement of their peers about Bitcoin’s blockchain foundations. Their fraudulent activities will remain secret for some time; these are some of Bitcoin’s cybersecurity challenges.
Humans forge interactions based on trust. Blockchain makes sense for companies looking for reliable and successful technology to power operations. Yet, due diligence matters when dealing with clients or partners since cybercrime and exploitation can quickly happen with zero suspicion.
Bitcoin & Cybercrime
Cybercrime manifests in multiple forms, including email scams and ransomware attacks. Criminals have found a worthy money laundering portal in cryptocurrencies. The high value of Bitcoin makes it a favorable option. In 2017 alone, European authorities reported the laundering of at least $5.2 billion on the continent. Governments worldwide are actively seeking anti-money laundering regulations for cryptocurrencies.
Bitcoin is easy to procure, and the entire process ensures relative anonymity, something that always attracts cybercriminals.
How To Keep Your Bitcoins Safe
Hackers are increasingly interested in accessing financial accounts and financial systems using social engineering. The EventBot trojan is a notable by-product of the pandemic. This malware targets financial accounts and wallets by appearing as a harmless app download (such as Microsoft Excel). It will then log your passwords, take over your phone data streams, and collect SMS messages in two-factor authentication.
To ensure that your Bitcoin and other crypto accounts and wallets are safe, here are a few steps to take:
- Enable multi-factor authentication
Microsoft notes that 99.9% of compromised accounts do not have multi-factor authentication (MFA) in place. Multi-factor authentication helps to reduce the incidence of email and other account takeover schemes.
- Enforce a distinct password policy
Every account should use a different password. Use a strong password manager for passwords to your Bitcoin wallets and exchange platforms. Strong passwords can make Bitcoin scams harder to implement.
- Use strong passwords
Passwords such as “12345” and “password” are unsafe as everyone seems to use them. Eighty-three percent of Americans use weak passwords, and this unhealthy culture is glaring in Bitcoin.
- Use up-to-date antivirus software
Virus-protection software is non-negotiable for anyone interested in Bitcoin. Even on Android, which represents all but 2 percent of mobile phone attacks, antivirus software is necessary as it’s easy to download malware to the device. Such malware may aim for your Bitcoin.
- Cyber hygiene is important
Good cyber hygiene means you only visit reputable websites, download applications from credible app stores or repositories. It also means you verify links before clicking on them or the sources of SMS or emails before opening.
Cybersecurity plays a crucial role in contemporary business. Innovative technologies such as Bitcoin and Blockchain are serious propositions, but cyber crypto-threats are also as real. It is safe to assume that Bitcoin scams will continue to rise, but the measures in this article are an excellent way to begin protecting your crypto assets.
David Lukić is an information privacy, security and compliance consultant at IDstrong.com. The passion to make cyber security accessible and interesting has led David to share all the knowledge he has.
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