Industry Analysis

Facts about cryptocurrency theft methods

The attack on Cryptocurrencies

Cryptocurrencies and Bitcoin brought forth the era of consensus into money transfer in a decentralised manner which has had an interesting impact on finance.

As individuals slowly learn why it is important to follow the consensus rules of cryptocurrencies, many think by simply using cryptocurrencies to do their transactions or as savings that they are safe. However, there are situations that have proven otherwise.

Theft in cryptocurrency is different from stealing in fiat-currencies or from a bank. There have been roughly 6 million BTC’s reported stolen throughout the years. Most of these are coming from scam projects, ICO’s and hidden or cloud mining services mostly championed by the use of privacy coins like Monero.

This has brought forth solutions like two-factor authenticating which makes it almost impossible to steal a user’s funds as the attacker will not only require the user’s devices, logins and password but also the clock.

It’s important to note that the blockchain itself cannot be hacked. It is the movement, unauthorised transfer or blocking access to the individual’s funds that the attacks are based on. One of the reasons why a person can still regain access back to stolen coins is because this has to be verified on the blockchain in order for that transaction to be valid.

Security in the industry has evolved overtime and is set to see new methods of security get developed like facial recognition, which is currently being tested by Kairo. This will also fall into the category of identifying a hacker, which will give cryptocurrencies higher security and resilience in the coming years.

Cryptocurrency theft methods

cryptocurrency theft methods
Info-graphics from ICO Pulse

What do you think about the ongoing thefts and hacks in cryptocurrency and ways of improving cryptocurrency theft methods?

Feel free to leave a comment down.

coinmag

My occupation is the Research of blockchains and their practical applications in the economy. I have graduated through various levels of education, including electrical technique, Business, Psychology, and innovative technologies.

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