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Cryptocurrencies are generally considered more secure than traditional fiat currencies because they use blockchain and cryptography technology to encrypt transactions and block double spending. Due to their better security performance, more businesses and individuals have shifted to using crypto as their primary mode of payment.
However, this massive shift to digitized assets has equally attracted several cybersecurity issues that can pose serious security challenges. Below, we’ll look at the relationship between cryptocurrencies and cybersecurity, examining how cryptocurrencies affect cybersecurity.
The Relationship Between Cryptocurrency and Cybersecurity
A successful crypto trade starts with building a secure trading environment for your transactions. Since cryptocurrencies are digital and are often stored in online wallets, they can be hacked, compromising the safety of your assets. Since cryptocurrency became a trend, there have been several high-profile crypto hacks that have led to the loss of billions of dollars worth of crypto in recent years. Here are the most common cryptocurrency scams that affect the cybersecurity of businesses and compromise individual and company security.
Investment Scams
An investment scam is an orchestrated move to lure targeted website users that the website offers successful crypto investment solutions. The website owners generate fake charts to convince users that their initial crypto investments are growing. However, the truth is there was never any investment, and when users finally realize they’ve been defrauded, their money is usually long gone.
The best way to avoid investment scams is to verify the genuineness of the website or platform by checking its reviews online. Genuine platforms like Kraken will have positive reviews and always have the correct price graphs, like Kraken's ETH price graph, showcasing live and accurate information regarding your preferred cryptocurrency.
Ponzi Schemes
A Ponzi scheme is an investment scam where perpetrators promise investors high returns and proceed to pay old investors using new investors’ money. Only the first few investors get some sort of returns, but eventually, everyone who doesn’t leave the scheme early ends up losing their money, with new investors bearing the biggest losses. Modern-day Ponzi schemes use cryptocurrencies for currency exchange, compromising the cybersecurity of affected cryptocurrencies. Like with investment scams, you can tell a Ponzi scheme by reading reviews before investing.
Phishing Scams
Criminals actualize phishing attacks by sending fake messages or emails that appear to be coming from a legitimate source at a quick glance. These messages often contain links leading to dangerous websites where your information is stolen, especially login credentials, or your computer is infected with malware.
To avoid falling prey, always ensure any link you’re about to click is directing you to a secure website with the initials “https” in front of the web address. If you’re a business owner, train your employees on how to detect and avoid phishing scams and send them some mock tests to keep them alert when real attacks occur.
Whether you’re running a business or are an individual crypto investor, keeping safe from crypto-related scams can boost your cryptocurrency’s overall cybersecurity. As cryptocurrency adoption keeps growing and its use evolves, more cybersecurity preparedness is essential to keep users’ digital assets safe and ensure they enjoy optimal returns.
