In recent years, one of the most popular growing trends in finance and technology is the use of “cryptocurrency.” This is a form of digital money with no physical or historical legacy basis in the way that fiat currencies like the dollar possess. Cryptocurrency exists as computer code shared across the Internet, meaning that its value is constantly confirmed and re-confirmed by the entire Internet, making it both easy to transfer and impossible to counterfeit. It is also deregulated and not under the control of any nation or bank, making it an asset that no government can control.
However, this rising popularity has also put it under more scrutiny. The US government is now laying the groundwork to regulate cryptocurrency, and part of the issue is the growing concerns about the cyber security around crypto. It is now experiencing a high rate of theft.
While cryptocurrency can’t be counterfeited the way dollar bills can, it can be stolen more easily than a fiat currency in some respects. One of the popular misconceptions of cryptocurrency is that transactions are extremely difficult to trace, and therefore it has become popular for illegal transactions. However, the fact that crypto-transactions are immutably stored on blockchain makes cybercriminals and theft easier to trace.
However, there is a serious cyber security issue with cryptocurrency, and that is the actual seizing and controlling of an account can be very easy. Depending on the safeguards a cryptocurrency owner takes or doesn’t because they are based on traditional web technologies, crypto accounts can be stolen and the funds transferred elsewhere. In addition, today’s crypto accounts are also vulnerable because a single crypto key is used for both a user’s identity and their account e-wallet address
Passwords Are Not Enough
One of the ways that cryptocurrency may be extremely vulnerable is if owners leave the security of their currency up to a single password. A single password, once figured out or stolen through methods such as phishing, means the account’s control can be seized, the legitimate user locked out of their own funds, and their cryptocurrency transferred to another account with only painful and costly forensics required to trace and recover it. Cryptocurrency’s greatest selling point – that it is anonymous and unregulated – is also its greatest weakness.
The best way to protect cryptocurrency is to take extra precautions. Multi-factor authentication is one way to make account takeovers more difficult since the addition of other authentication factors renders the theft of a password harder. Switching over to other cyber security measures, such as passwordless authentication systems like modern FIDO biometric authentication, is another way to ensure that typical phishing and identity theft methods fail to penetrate a system.
As the world relies increasingly on digital storage and access, cyber security measures need to keep up. For the best digital protection and peace of mind, learn more here about Nok Nok’s modern identity and passwordless authentication and how it protects multifactor security measures.