Opinion Ed:The Surge of Bitcoin after the Financial Crisis & New Challenges to Cybersecurity
This is a Opinion piece from David Lukic a Security and Compliance Consultant from the website IDstrong.com
Bitcoin became a safe haven for investors in the wake of the 2008 financial crisis, after which bitcoin was introduced in January 2009. There were several reasons for this.
Like gold, bitcoin is not tied to any other asset. Its value operates independently of markets, rising regardless of a fall in value for stocks, and agnostic to changes in government bonds. This gave it a perception of reliability.
Bitcoin is also unregulated, which means that bitcoin scams create a potential danger for unsavvy investors. In the wake of the financial crisis, a jaded public found little trust in the traditional financial institutions and this aided in the growing value of bitcoin.
The public’s trust in cryptocurrencies such as Bitcoin has also paved the way for hackers with bad intentions to take advantage of investors. This is now the age of cybersecurity with cryptocurrency; a time where the robber stealing from your bank has been replaced with a hacker who has stolen untraceable currency.
The Role of Government & Your Money
The role of the government affects the economy, and therefore your money, through monetary and fiscal policies. With monetary policies, the government can control how much money is in the economy.
Since the government controls the supply, they can increase the supply of money within the economy. If they print too much money though, it does mean that money within the economy loses its value.
The monetary policy works the other way by controlling interest rates, increasing the cash rate at which banks can lend.
Through government fiscal policy, the state can also control how much is taxed and how much is spent publicly. With Bitcoin, the government controls neither. Bitcoin’s value is heavily based on the limited supply and the heightened demand for the currency.
What Makes Bitcoin Prone to Cybercrime Core Idea Behind Bitcoin
Bitcoin is a peer-to-peer cryptocurrency. Transactions are verified across the network in a public ledger called a blockchain. It is a completely decentralized currency with no bank or country to call home.
The platform itself is what gives bitcoin its value. It is a highly disruptive technology for the financial industry. The following traits are what makes bitcoin so desirable to many:
● Digital in nature- There is no solid currency, but a bitcoin wallet is needed to spend bitcoins offline. This could be as simple as a printed piece of paper with the bitcoin key.
● Untraceable – Unlike money in a bank, bitcoin cannot be traced back to any single user. This makes bitcoin fantastic for criminal networks.
● A decentralized currency – means that there is no central bank, no central administrator, no central storage, no central server. The bitcoin ledger is shared between users. It cannot be manipulated.
However, the combination of the above factors does make this digital currency prone to bitcoin scammers.
Bitcoin & Cybercrime
The introduction of the world’s first cryptocurrency created opportunities for cybercrime. There was suddenly a payment form that was increasing in value, as well as completely untraceable. This produced many opportunities for criminal activity.
The most basic of these results in cybercriminals hacking cryptocurrency trading platforms to steal funds or sell cryptocurrency that doesn’t exist. There are also other types of bitcoin scams.
In cases of ransomware attacks, cryptocurrency is already the most preferred form of exchange. Cryptocurrency is perfectly suited to cyber money laundering since it is untraceable. Drug and black-market arms dealers have also grabbed the opportunity to use bitcoin in their seedy transactions.
How To Keep Your Bitcoins Safe
When it comes to owning bitcoin, it is best to ensure that your investment is safe and secure. If someone takes your bitcoin wallet, then it is gone forever. Not only is it important to back up your wallet for safekeeping, but make sure that your wallet is also encrypted.
It is important that you never forget your password since once it’s gone it can never come back. When it comes to trading, it is a good idea to check you are trading with a secure and reliable platform and check that the web address is correct while you are using that platform.
One of the main bitcoin scams is to create a fake exchange mimicking a real platform. As with any interaction on the internet, make sure you take steps to keep safe from identity theft, espionage, or your information being manipulated to the benefit of others.
Cryptocurrency such as Bitcoin presents a fantastic opportunity for investors to realize some strong investment returns. Unfortunately, Bitcoin scams are also fantastic opportunities for dangerous hackers with bad intentions to profit from cryptocurrency.
By exercising safe trading habits and safeguarding one’s investment, the investor can enjoy making a profit without falling victim to bad intentions. Making a profit from cyber trading starts with education around cybersecurity rules.
BIO: David Lukić is an information privacy, security, and compliance consultant at IDstrong.com. The passion to make cybersecurity accessible and interesting has led David to share all the knowledge he has.
David Lukic is a Security and Compliance Consultant for IDstrong.com