The current bearish market trends have continued from 2018 which saw major cryptocurrencies lose more than 80% of their market capitalization. In 2018, the crypto world saw multiple exchange hacks, digital assets being stolen and one of the largest exchange hack of all time. Crypto wold saw many new records in the past year, but not necessarily the good ones.
2017’s all-time price rise of crypto assets saw many new investors making a foray towards the crypto space, however, the sudden boom in interest of investors also attracted the hackers towards the crypto space as well.
With sudden boom in the interest due to the price rise, the major exchanges around the globe could not put necessary security features in place to counter potential attacks from the scammers, who are equally aided by the technology if not less.
What Can We Learn from the Security lapses in 2018?
Cryptocurrency exchanges around the globe deal with billions of dollars worth of cryptocurrencies on a daily basis, which make them a magnet for hackers. Hackers figured it out that targetting an exchange is less-risky and much more profitable than a bank vault.
Coming to the crypto exchanges, they are primarily a fintech and not cybersecurity experts, and these exchanges have provided time and again that their security awareness towards the asset they hold or people expect them to keep secure.
In order to ensure that such events are not a common occurrence in the coming years, these exchanges and their stakeholders need to re-plan their security measures as the heists on these exchanges directly affect the value and market of cryptocurrencies.
Hacks Are Becoming More Sophisticated
Another major issue when it comes to the security of exchanges is that hackers and scammers are becoming more sophisticated every day. As the interest and acceptance level are rising for the cryptocurrencies, the scammers have decided to make use of the technology in the more sophisticated way.
The major scam highlights of 2018 saw many scammers duping people of their crypto asset by pretending to be verified twitter personalities and in one case even Elon Musk. Cryptocurrency was always promoted to be a tamper-proof technology, which still holds true, but people need to realize that scammers do not necessarily have to tamper with the technology which crypto is based on, but its more of exploiting human negligence and error.
Take Twitter scams in general, where the hackers posted a link to their wallet addresses while claiming to be someone from the crypto space. A layman who is just riding high on the market trend might not understand why a noted personality is asking them to send their Bitcoin to them.
Each day $2.7 Million is Stolen From Exchanges
2018 was probably one of the worst years for the investors who jumped on the crypto bandwagon after the massive price rise. However, the crypto market proved to be the best option for scammers, as one of the reports suggest that $2.7 million worth of crypto were stolen every day from the exchanges.
So, what is the prevention measures one can take to avoid such nuisances in the future? Well, one can start from holding their digital assets in offline wallets rather than keep it on an exchange which is the most preferred target for the hackers.
Cryptocurrencies are backed by the decentralized technology, not the exchange. Exchanges around the world are still as centralized as a bank. In some cases, the exchanges have been found guilty of mismanaging the assets of the users and even accused of thefts in certain cases.
What Security Measures can be Taken to Minimize the Risk?
The technological advancements are both boon and bane for society as the good ones use it for the betterment of the society while there are always bad apples in the society who go against the norm. However, at a personal level, the users can take a few precautionary measures on their behalf to minimize the damage.
- Use hardware or offline wallets for securing your crypto funds, instead of relying on the exchanges to keep your crypto asset safe.
- Make sure your private key is kept secure and does not fall in the wrong hands.
- Always keep your recovery seed safe so that you can get your wallet recovered even when you have lost it or misplaced it.
- Don’t fall for click-bait, if an advertisement over the internet seems too good to be true, chances are its a scam.