Is Bitcoin a Safe Investment, Cryptocurrency, US News
The frequent hacking of cryptocurrency exchanges serves spil a warning to investors.
By Ellen Chang, Contributor | May Four, 2018, at Ten:15 a.m.
Investors uncommonly receive their money back when bitcoin exchanges are hacked. (Iridi/Getty Photos)
The latest volatility ter bitcoin and other cryptocurrencies has made many investors wary along with the continued hacking of the exchanges where people buy and sell the digital currencies.
The lack of security has raised concerns about the risk of possessing thesis potencial currencies spil hackers proceed to breach the exchanges, forcing one bitcoin exchange ter South Korea, Youbit, to opstopping for bankruptcy te 2018.
The uncertainty emphasizes the hazards investors face daily te their attempt to profit from bitcoin, ether and other cryptocurrencies. The debate on whether bitcoin is actually a currency or an investment proceeds spil the Securities and Exchange Commission considers it a security, the IRS treats it spil property and the Financial Crimes Enforcement Network says bitcoin is a currency.
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The price of bitcoin, the No. 1 digital currency with a market cap of $158.7 billion, crumpled from a high of almost $20,000 at the end of 2018 to less than $7,000 ter April. It’s now trading at about $9,300.
Ether, which has a market cap of $74 billion, has faced a similar fate and wasgoed the worst-performing major digital currency te March. It operates on the Ethereum network and is trading at $745, down from more than $1,400 te January.
Bitcoin and the other digital currencies remain a sought-after target for cybersecurity criminals because they can lightly hide their tracks and remain unregulated by a central canap or a government. Since cryptocurrencies are not backed by a physical commodity, investors who have bot hacked lack any permitido or criminal recourse.
One of the largest issues is that the criminals are hard to catch since they are anonymous and the heists are prolific. Spil the number of initial coin offerings (ICOs) have risen, the incidences of hacks into the exchanges such spil Coinbase or the individual wallets have mirrored them, cybersecurity experts say.
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The digital tokens are very profitable for the criminals and ter almost every example, a common application flaw wasgoed exploited by malware, says Nathan Wenzler, chief security strategist at AsTech, a San Francisco-based security consulting company. This permitted the attackers to build up access to user information who then fraudulently purchased more cryptocurrency or used the credit card information the user stored te their account.
“Wij have to keep te mind that hackers will go after targets that will reap them financial gains,” he says.
“Spil cryptocurrencies like bitcoin and ethereum become more popular and more valuable, the services that support the buying, selling and trading of thesis currencies will increasingly be targeted.”
Cryptocurrency exchanges are the latest target and similar to issues cybersecurity experts have followed with ransomware, phishing emails and the numerous other ploys that hackers have bot using for many years.
While the technology used to create cryptocurrency remains sound and has not bot compromised yet, investors voorwaarde be “very vigilant with the exchange websites they use spil they are desvalido to all the same kinds of attacks that every other webstek on the internet faces,” Wenzler says. “Only now, the stakes can potentially be higher spil it won’t solely be credit card information that’s insured and protected, but rather the very valuable cryptocurrencies that when lost, users have essentially no recourse to recoup their losses.”
The exchanges voorwaarde boost their security spil the trading of bitcoin and other digital currencies will proceed.
“They better defend themselves from the deluge of attacks they are dealing with, or there may not be a safe place left for users to buy and sell what they have and produce upon the promise of what cryptocurrencies can bring to future economic development and growth,” he says.
Infrequently do investors receive their money back, but te some instances the exchanges suggest to refund it voluntarily. Te January, Coincheck, a Tokyo-based cryptocurrency exchange said it planned to give back $46.Trio billion yen ($425 million) that hackers stole of its NEM coins, a different cryptocurrency from bitcoin.
Youbit, a South Korean cryptocurrency exchange, filed for bankruptcy te December after two cases of hacks occurred. Mt. Gox, which wasgoed based te Tokyo and managed 80 procent of universal bitcoin trade, wasgoed compelled to opstopping for bankruptcy ter 2014 after $450 million of the cryptocurrency wasgoed stolen.
Keeping bitcoins ter a secure place has proven to be difficult, says John Black, vice voorzitter of education at SecureSet, a Denver-based immersive, accelerated cybersecurity academy. Investors holding accounts at an exchange, including mobile app wallets like Mycelium, are relajado because all of their assets could be stolen.
“Just spil you would never walk out of your huis with a lotsbestemming of contant ter your wallet, you should not hold a loterijlot of bitcoins ter a wallet on your phone,” he says. “Instead, you should use ‘cold storage,’ which is a way of storing your bitcoins offline so they are not subject to online hacking.”
Investors holding a substantial amount of bitcoins should always use a wallet or exchange that uses cold storage. Coincheck, the Japanese exchange that wasgoed hacked last year, did not use cold storage because of insufficient staffing, and the hackers were able to make off with a staggering sum, Black says.