There are a lot of concerns regarding cryptocurrency. The mounting number of hacks and scams need to be addressed. Keeping Bitcoin investments safe has never been more important than today and requires some personal responsibility.
A Rough 2018 for Bitcoin Users
Anyone storing their cryptocurrency in a wallet they do not fully control is at risk. This became painfully evident yet again with the Coinrail hack. Although no bitcoins were stolen, it is a clear warning sign as to how things will need to change. Additionally, the Coincheck hack earlier this year also pointed out major flaws. Storing funds on an exchange is convenient, but it also leaves the door wide open to hacks.
In fact, experts expect hackers to continue to target cryptocurrency exchanges. It is a high risk-high reward situation, but one that can be worth it for criminals. After all, the rewards can easily go as high as $10 million or more. Getting away with such hacks will become increasingly difficult, though. The number of blockchain analysis firms is on the rise, and tracking transactions are usually relatively easy.
An interesting statistic was provided by Yo Kwon, the CEO of Hosho Group. He goes as far as claiming one in three cryptocurrency exchanges have been hacked at some point. There may be some truth to that statistic as there are a lot of smaller exchanges that have run afoul of such mischief. That tilts the scales a bit in one direction, although most major platforms remain relatively safe.
Protecting Investments Remains Key
It is evident the increasing number of hacks has regulators concerned. Whether or not that will be a positive development remains to be seen. All they can do is force companies to beef up their security measures. Such developments are taking place in most Asian countries right now, especially Japan.
Another option is how users need to take full control of their funds. Storing Bitcoin or altcoins in a regular wallet – or a hardware version – is the best course of action. Relying on exchanges and wallet providers is not a smart choice. Financial freedom also comes with a lot of responsibility. This is especially a valuable lesson for smaller investors.
The cryptocurrency world is a very unique creature. Convenience should not be the go-to concept for anyone looking to invest in Bitcoin or altcoins. Unfortunately, the reality is very different. Exchanges will remain prone to hacking attempts and criminals will periodically succeed. All the more reason for consumers to take matters into their own hands, first and foremost.
How do you store your cryptocurrency? Do you keep it on an exchange or in cold storage? Let us know in the comments below.
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