The Importance of Cybersecurity in Cryptocurrencies

When the first modern cryptocurrency emerged in 2009, it not only made the entire global financial market very excited but also left the common men eager. I remember people around me going nuts, talking 24/7 about Bitcoin, dreaming of becoming millionaires, and who knows, maybe billionaires and that too, in days. Much of this unabating economic enthusiasm was perhaps the result of the infamous financial crisis grappling with the international market in 2008, which shook the masses’ trust in banks and governments. The short-lived element of hope and exhilaration among people was in full swing back then- to an extent, it obscured their anticipation of possible future cyber attacks against this newly found mode of digital transactions.

What many people failed to comprehend those days is that cryptocurrency is just like any fiat currency, with the fundamental difference being the former is not backed by the government and is not legally tendered and exists only within the domain of the virtual world. In other words, it is as vulnerable to cyber attacks as other forms of money. Threat actors, on the other hand, remained busy trying to devise new strategies to exploit the growing digital transformation to their advantage. To their luck, digital currencies proved to be another addition to the hit list.    

Although blockchain technology, through which crypto transactions occur, is generally considered secure, cybercriminals, as indicated earlier, are never short of tactics to mould their malicious intentions.    

Key Risks to Consider:

Vulnerable Trading Platform: With Bitmart stripped of USD $200 million in a digital fraud in late 2021, the questions regarding the security apparatus of the crypto trading platforms started surfacing. Cryptocurrency exchanges occupy the number one spot in the target list of hackers as they accommodate a colossal amount of virtual money. A single breach can lead to the theft of crypto assets worth millions of US dollars.

Initial Coin Offering (ICO) Fraud: There are reportedly over 10,000 cryptocurrencies in the market today but are all of them genuine? That is the cause of concern as many of them are not. Many cryptocurrencies launched with big claims and guaranteed returns turn out to be nothing more than scams.

Third-Party Applications: As long as you restrict third-party applications or software to the management of your digital assets, they can render fruitful outcomes but giving them access to your sensitive information will mean getting a life lesson since such apps can expose your personal data to others without you knowing anything.

Malware: Often termed “crypto-jacking” or “crypto Malware.” It facilitates the unauthorised users to access others’ computers and mine their cryptocurrencies, usually in two ways: Fooling users into interacting with malicious codes on their PCs through phishing mechanisms and injecting such codes into websites or internet advertisements so that, on any interaction between the user and the code, hackers could get access into the host computers.

Giveaway/Investment Scams: Individuals can often be lured to send their cryptocurrency to hackers who either pose as famous well-established investors or research and survey firms highlighting the investment growth in the future. Part of such fraud is fundamentally due to the lack of cybersecurity education and awareness among people.

However, when there is a will, there is a way. Some pivotal factors to address to ensure more robust cryptocurrency security are:

• Sharing your sign-in credentials is a “big no.”
• If a company hesitates in giving explanations and details about the claims, it is more likely a fraud. Research well and be watchful. Asking for a token before investing anything is not a bad idea either.
• In the modern age of digital transformation, clicking on suspicious links or ads will only, sorry to say, expose your cyber gullibility.
• Having a unique password and awareness of the latest crypto trends are highly advisable.