Cryptocurrencies

Cryptocurrency Security Challenges

First of all, we should have a brief idea about bitcoin and other cryptocurrencies before getting into depth about challenges related to its security. In recent times, the world of cryptocurrency has evolved a lot into a successful platform. There has been some real buzz in the world of blockchain technology in the last few years.

The value of bitcoin has subsequently increased and so has its trend among people worldwide. There have been certain predictions that infer that cryptocurrency will have a huge role to play in the near future in a lot of spheres (public and private sector). There always remain certain risks associated with crypto-security which we will discuss in this article.

Basics of cryptocurrency

Cryptocurrencies are digital or virtual currencies. A large number of powerful computers come into play for the mining processes and adding blocks in a blockchain. In the blockchain, the history and data of all such transactions are stored in a decentralized manner.

The security of crypto use is completely dependent upon the regular and vigorous work of computers. The vulnerability in the security of cryptocurrencies arises from its sheer dependability on codes. Exchanges in digital currencies occur entirely on a decentralized platform. Hence, there would be no third party liable for any mishap that occurs during a transaction.

Major security challenges

  • Cryptocurrency transactions have been a victim of various high-profile hacking and fraud incidents. The digital wallets and various other platforms like bitcoin x on which the transactions are performed are prone to hacking and it is not the cryptocurrency itself.
  • Several unregulated transactions lack proper cybersecurity standards making the transactions more susceptible to hacking. One of the major drawbacks is the need for mining that requires computers.
  • Hacking is not limited to the world of cryptocurrencies. As it involves the cyber system, many banks and government-regulated systems are also always at risk (via internet banking, online banking apps, etc.). Hence, we can say that there lies equal concern of risk in exchange of both FIAT and digital currencies.
  • One of the major concerns is with more than fifty percent of a network being owned by the same group of people. This enables them to manipulate transactions and exchanges on what is no longer a decentralized network.
  • There have been several instances in which the crypto world had to face fraud and scams. Unregulated and unauthorized network providers often lure traders and investors into such scams, stealing millions of dollars. This is a major drawback of some platforms that are not authenticated and continue to work without anybody getting suspicious.
  • About ninety percent of security breaches and cyberattacks occur due to some issues that the blockchain cannot eliminate like human errors and social engineering. Technology moves forward at a greater pace than what humans can cope up with and this brings major problems in the technological world.
See also  Applications Of Bitcoin Blockchain

What can be done to overcome security challenges?

  • People involved with the technology believe that blockchain networks are more or less unhackable, although the software used remains at risk. The threats can be monitored to a great extent by cybersecurity professionals. Developing various analytical and technical skills can come to the rescue for such issues.
  • Encryption of data transmitted through blockchain technology is a must. Cybersecurity professionals can mitigate some threats with the help of some proper encrypted technology.
  • Proper communication can articulate potential security hazards amongst cybersecurity professionals, giving scope to the introduction and development of much better security systems in the future.

Conclusion

No matter how efficient and enhanced the security system of blockchain technology is, it always has some challenges. Once some progress occurs and few challenges are overcome, new threats appear as well. It is for all the users including you and me to remain well informed about such issues and involved in the cryptocurrency world with precautions.

About the author

Venkatesan Prabu

Wikitechy Founder, Author, International Speaker, and Job Consultant. My role as the CEO of Wikitechy, I help businesses build their next generation digital platforms and help with their product innovation and growth strategy. I'm a frequent speaker at tech conferences and events.

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