By October 2017, a cryptocurrency called One Coin accumulated around $17 billion in value. Then One Coin’s founder went missing. Investors soon found out One Coin was not a cryptocurrency at all. They were duped by a Ponzi scheme and lost a lot of money (DATAVERSITY, Ben Hartwig, Cybersecurity in Cryptocurrency: Risks to Be Considered, June 10, 2021, https://www.dataversity.net/cybersecurity-in-cryptocurrency-risks-to-be-considered/). The One Coin scam was one of the biggest in cryptocurrency history. But this is not the only thing cryptocurrency beginners should consider before they start buying it. People and businesses are attracted to cryptocurrency for a variety of reasons, to trade or sell like a stock market investment, or to use it to pay for goods or services as an online debit card purchase. The problem is, cryptocurrency is not like any other investment, yet it is susceptible to the same cybersecurity risks as any other online account or transaction. In this blog, we’ll explore some of the risks associated with cryptocurrency. RB’s Computer Service is not pro or con cryptocurrency in any way. The purpose of this blog is to help the cryptocurrency beginner from falling for a scam or becoming a cryptocurrency cybersecurity victim.
Cryptocurrency is Not Like Other Investments
It is understandable cryptocurrency easily attracts the beginner’s eye. For example, Bitcoin-a type of cryptocurrency had a price of zero when it was introduced in 2009. On July 17, 2010, its price jumped to $.09. Bitcoin's price rose again on April 13, 2011, from $1 to a peak of $29.60 by June 7, 2021, a gain of 2,960% within three months (Investopedia, John Edwards, Bitcoin's Price History, December 09, 2021, https://www.investopedia.com/articles/forex/121815/bitcoins-price-history.asp). If Bitcoin were a stock or Treasury bond, that would make for a fantastic return on investment. Yet, cryptocurrency is not like a stock or a bond. For example, cryptocurrency has no intrinsic value. They are not backed by any physical asset, like gold or silver, and there’s no central regulator, as the US Treasury to ensure that the value remains stable. Cryptocurrency is not backed by the “full faith and credit” of the U.S. government like the US dollar. Furthermore, cryptocurrencies aren’t linked to the profits of any one corporation, like stocks. Cryptocurrencies are not “backed by anything other than the faith of the people who own them (The Washington Post, Eswar Prasad, op-ed-Five myths about cryptocurrency, May 24, 2021, https://www.washingtonpost.com/outlook/five-myths/cryptocurrency-yths-bitcoin-dogecoin-musk/2021/05/20/1f3f6c28-b8ad-11eb-96b9-e949d5397de9_story.html).” When there are “more people buying Bitcoin, the value will increase. When there are fewer people buying Bitcoin, the value will decrease (FortuneBuilders.com, Paul Esajian, How to Invest in Bitcoin: A Beginner’s Guide, https://www.fortunebuilders.com/how-to-invest-in-bitcoin/).”
Cryptocurrency is Susceptible to Cybersecurity Risks
Cryptocurrencies' cybersecurity risks are like those in other types of business. You need to treat your accounts on these platforms with a lot of caution. Hackers can steal your private key, like a password for anything else. Or cybercriminals can hack into a cryptocurrency trading platform and steal funds. Cryptocurrency has proven to be the preferred method of exchange for hackers to collect on ransomware attacks. Finally, on this point, cybercriminals can hide their true identities when asking for ransom in digital currencies. Because cybercriminals can steal in an untraceable environment, a cryptocurrency account is an ideal target for hackers and scammers (The Washington Post, Eswar Prasad, op-ed-Five myths about cryptocurrency, May 24, 2021, https://www.washingtonpost.com/outlook/five-myths/cryptocurrency-yths-bitcoin-dogecoin-musk/2021/05/20/1f3f6c28-b8ad-11eb-96b9-e949d5397de9_story.html).
How to Avoid a Cryptocurrency Hack
In addition to using extreme caution, do your research before you jump into buying cryptocurrency, and embrace basic cybersecurity practices. For example, be on the lookout for phishing email scams. Cryptocurrency cybercriminals love spam email messages that can lead to a ransomware attack. Phishing emails often look legit. Antivirus email software can often catch suspicious emails, but not always. Be especially leery if you accidentally click into one that redirects you to a legit-looking website landing page, but the URL/domain name is off, and you are prompted to log into your account to review something alarming or some type of fantastic news. Just like passwords, your cryptocurrency private key should be seen as sacred. Cryptocurrency trading platforms require you to set up an account linked to your bank account. To access your cryptocurrency “wallet,” you need a private key. Protect it. Finally, carefully vet third-party apps that can be used to manage multiple cryptocurrency accounts in one platform (DATAVERSITY, Ben Hartwig, Cybersecurity in Cryptocurrency: Risks to Be Considered, June 10, 2021, https://www.dataversity.net/cybersecurity-in-cryptocurrency-risks-to-be-considered/).
Under the umbrella of cryptocurrencies security risks, there are several other topics we could write about. RB’s Computer Service is not pro or con cryptocurrency in any way. Our goal in this blog is to help the cryptocurrency beginner from falling for a scam or becoming a cryptocurrency cybersecurity victim. Like most things in life involving money, before you jump into something new, do your homework and learn how to avoid making mistakes. Cryptocurrency is no different. In addition to providing malware and ransomware prevention strategies and programs, RB’s Computer Service sells quality previously owned commercial-grade laptops. For a hassle-free consultation, contact us via phone or email: 763-441-3884, techs@rbsmn.com. RB’s Computer Service can provide strategies and managed IT service agreements to help prevent Ransomware attacks. We sell the best commercial-grade firewall routers, business computers, computer parts, computer monitors and provide computer repair, iPhone and smartphone repair, and tablet repairs to customers and clients throughout central Minnesota and St. Cloud.