Is Cryptocurrency Really Secure?
Is Cryptocurrency Really Secure?
If you’ve been following the cryptocurrency market then no doubt you’re aware of the volatility of this digital currency. You’ve already seen the massive swings that Bitcoin, Ripple and others have taken over the past several months. Although the big jumps and crashes have made most of the cryptocurrency headlines.
There has been another trend going on with cryptocurrency that hasn’t been getting as much attention: security breaches.
Hacks Becoming Commonplace
There have been several hacks in the digital coin market, including the Bitfinex hack, the DAO hack, and the Mt. Gox hack. In addition, in January of this year, Coincheck, a Japanese cryptocurrency exchange said hackers stole 500 million tokens of NEM, with a value of about $400 million. With cryptocurrency as a whole gaining more attention every day, the possibility of more frequent attacks is also growing. That begs the question: is cryptocurrency safe? There are actually two elements to this question. First, there are the actual cryptocurrencies themselves. Are these digital coins secure? Is their protocol capable of stopping hackers? The other part of the equation takes aim at the cryptocurrency exchanges. So far, the major hacks have happened at the exchange level.
Are the Exchanges the Problem?
In fact, according to Cryptocurrency expert,and co-founder and president of Blockchain University, Robert Schwentker,”The hack of the Bitfinex exchange in Hong Kong, which resulted in approximately 120,000 bitcoins being stolen—wasnot a hack of Bitcoin protocol itself.”Scwentker recently spoke with the ISMG networkand discussed the safety and security of cryptocurrency and its exchanges. He also pointed out that the Bitfinex hack “is similar to the Mt. Gox hack, where an exchange got hacked. Certain security protocols apparently might not have been followed, and the practices that they set up were not followed. Therefore, there’s been this loss of people’s funds.”
Is it Time for Regulatory Measures?
That begs the question, should regulatory oversight be put in place to oversee the cryptocurrency exchanges, like Coincheck, Kraken, Coinmama and Coinbase, for example? Time will tell if these measures are taken, but with the number of hacks increasing, perhaps it’s time to look at this matter more carefully.
Other Threats to Crypto Security
Hackers aren’t the only threat to cryptocurrency. There are also scams that trick people into purchasing fake digital coins and leaving them with nothing. Plus, Bitcoin and other cryptocurrencies can also be lost or stolen, even with something as simple as a hard drive crash. Because cryptocurrency is a digital form of cash it’s stored in cyber wallets. These wallets can easily be stolen or even lost. Hackers can penetrate wallets stored in the cloud. But even if you choose to store your digital coins on a personal hard drive, they aren’t completely safe. If your hard drive crashes there’s a good chance your digital wallet will disappear with it, leaving you with nothing.
Store it With Caution
This is why many cryptocurrency owners have turned to the exchanges to safely store their digital coins. However, as detailed above, even the exchanges are not completely safe. Thus, cryptocurrency, much like physical currency, is not immune to theft or loss. So, if you decide to get into the cryptocurrency market, make sure you consider all your options to keep your digital wallets safe.
We hope you found this article about “Is Cryptocurrency Really Secure?” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
To receive our free newsletter, contact us here.
Subscribe to our YouTube Channel for more updates.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
GROCO.com is a proud sponsor of The American Dreams Show.
The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.
Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.
They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..
American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:
Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…
MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness. It’s mission statement:
In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.
Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.
Taking Over the Family Business with Pamela Kan, President of Bishop-Wisecarver Corporation See Pamela’s recent interview with Alan Olsen on Youtube: https://youtu.be/-KvsbCcfmaM Pamela Kan has been the President of Bishop-Wisecarver Corporation since 1999. She is a highly respected leader in the manufacturing and engineering industry, and has been instrumental in growing the company into the…
Igniting Others With Kary Oberbrunner See Kary’s interview with Alan Olsen on Youtube: https://youtu.be/IfPrM7b9LII Do you struggle through life feeling lost? Do you want to find your dream job or perform better at your current day job? Are you looking for a new secret weapon for mastering life? Kary Oberbrunner is a Wall Street Journal…
Today we discuss:
-IRS inflation related adjustm…
Thanksgiving is one of my favorite times of the year because it helps me to remember the many things I have to be grateful for: my family, relatively good health, friends, job, religious freedoms (I should probably use more often), and too many other blessings to list. Not to mention the Thanksgiving meal, mashed potatoes,…