There had been many debates on cryptocurrency security over the past several years, fueled by multiple incidents where exchange platforms had been hacked and users lost their tokens. Although the cryptocurrency industry includes many different parts, each with its weaknesses, we would like to isolate crypto tokens and see whether they come with enough security to be a valid replacement for the actual fiat monetary system.
Crypto Security depends on the Blockchain Infrastructure
Considering blockchain technology is at the core of cryptocurrencies, it is assumed that security issues in the case of it will transpire into less secure crypto. As a result, the level of security in each system will depend on the quality or the effectiveness of the blockchain infrastructure.
Curtis Miles, Solution Architect & Canadian Technical Lead at IBM Blockchain, mentioned the ideal blockchain network should prevent access to sensitive information (a.k.a private keys), deny illicit attempts to change data, and carefully guard encryption keys using the highest security standards.
Preventing attacks from within and outside of the blockchain should be the main goal if we want to ensure the highest degree of security. Still, it is important to note that blockchain security is not enough. In a world where people and companies are involved in Bitcoin trading, cross-border crypto transactions, and commercial activities involving crypto, other security threats could arise.
Users are responsible for the Security of their Cryptocurrencies
Regardless of the efforts made by any cryptocurrency project to ensure the highest security level, it will eventually come down to how each user is using crypto. In 2020 there are multiple ways to keep crypto secure, including wallets (electronic or hardware) and multiple authentication levels (biometric, Google Authentication, etc.).
At the same time, it is critical to keep sensitive information (like the private keys) away from any third-party, to not dampen any efforts to keep crypto secure. The cryptocurrency industry is still in its early stages and because of that, beginners need to get the proper education before learning how to deal with crypto properly.
As long as hackers and thieves can always find new and ingenious ways to steal cryptocurrencies from individuals not taking security seriously, it is key that more actions to create responsible crypto usage are initiated. Using up-to-date operating systems, antivirus and anti-ransomware solutions, and password managers should be a new normal among all cryptocurrency users.
In 2018, cryptocurrency thefts and scams hit $1.7 billion, while in 2019, the number jumped to over $4 billion. SIM swapping, phishing, URL hijacking, and other similar methods had been used and even some of the largest companies were unable to prevent them completely. It should be no surprise that people are not moving towards cryptocurrency derivatives and other ways to get involved in the crypto industry, without facing the traditional security risks. However, even with physical crypto, as long as there is a mix between blockchain enhancement towards security and responsibility from all users involved, cryptocurrencies have a high probability to become secure.