Cryptocurrency are considered to be the same as electronic money. It means that they also have the same problems as classic e-payment systems.
The operating principles specific to cryptocurrencies sometimes make the problems more likely to occur, and thus more alarming. Moreover, the same principles are responsible for a certain number of risks unique to cryptocurrencies.
Common Security Issues with Cryptocurrency Investments
To deeply understand the world of cryptocurrency, here are some of the common risks and problems that people encounter:
As with ordinary e-money, users can be tricked into going to a phishing website where they upload their cryptowallets and enter a password. Of course, users of a traditional bank or payment system can also run into trouble with cyberthieves. However, with a traditional system there is always a fairly good chance of canceling the transfer. In the case of cryptocurrencies, you might as well try to complain to the United Nations. What happens in the blockchain stays in the blockchain.
2. Hacking of payment
On top of that, even using a genuine payment gateway with the correct address can result in a loss of money. The most popular web wallet for Ethereum, Classic cryptocurrency, suddenly started stealing money from its users’ wallets.
Hackers used social engineering methods to convince the hosting provider that they were the real domain owners. After gaining access, they started intercepting cash flows.
3. Loss of wallet
There’s one more problem that is typical of cryptocurrencies: loss or theft of a wallet. Most users store their cryptocurrency wallet files on their computers. Therefore, they can be stolen using malware or lost if the hard disk crashes. The situation with “centralized” e-money is far better at present. It’s the rare Internet bank that doesn’t require two-factor authentication and confirmation of transactions using SMS with one-time-use passwords. And in the case of corporations or large amounts, the use of a USB token is mandatory.
4. Insecure ICOs
Investing in projects associated with a blockchain or cryptocurrencies became very popular among cryptocurrency holders. This type of fundraising is called an ICO — Initial Coin Offering. More than $1.7 billion has already been raised through ICOs in 2017. You don’t hear much about successful projects, but investors are still optimistic. The problem is that the cryptocurrency market still isn’t regulated by any means, there are no risk assessment mechanisms, and there is no guarantee — like at all — of return on investments, except the word of honor of people who came up with the project.
Risk Mitigation Solutions for Cryptocurrency Investments
Despite the increasing risk and problems, hospitals, local governments, public and private organizations are lacking the proper defenses against this costly and increasingly prevalent attack. On the other hand, government institutions have suffered less impact from ransomware and similar attacks. Here are some ways that they are finding and abating ransomware attack through hierarchical, determined approach to IT.
1. Access management
Organizations should depend on their human resources departments. It includes comprehensive background checks, to complex onboarding processes, they ensure everything is buttoned up and in its place. This includes restrictive access to administrative privileges. They stay purposefully tight with credentials, making exceptions only in very rare cases. In this way, they maintain a broad view of which endpoints have permission to reach critical systems; this tactic is instrumental in isolating potential threats and minimizing their impact.
2. Multiple backup
We all know that businesses can not afford to take data protection lightly. The information in their hands directly affects their clients, and it is their responsibility to ensure it remains safe from malicious attackers. By backing up their data often and without compromise. They analyze risk tolerance for different data sets, and store what they can in the cloud. They take routine snapshots of their data and store redundant versions on premises. And, perhaps most importantly, they ensure that no mission-critical files are stored exclusively on singular end-points.
3. Increased security
Above all, every organization should create a strong security posture, especially against ransomware. While anti-malware and strong firewalls can help, these are only part of the equation. As threats grow increasingly advanced, individual solutions no longer suffice. There is no silver bullet. But there are steps that when done, will enhance security. One good is example for this is the use of two-factor authentication.
In the meantime, there is a lot of funding going toward a combination of blockchain, security and cryptocurrency, and smaller startups will crop up at an impressive rate to throw their hat into the ring to try and solve the issues. Time will tell how virtual currency security issues ultimately get resolved, but as we wait, keep changing those passwords.