As with all things involving the Internet and money, cryptocurrency has also come under attack by hackers from time to time. Study says cyber criminals netted $4.3B from crypto-related crime in 2019. While the cryptocurrencies themselves are strong, hackers often target the institutions holding large amounts of currency.
“The results show that privacy coins are barely used in dark markets and at dark vendor sites (e.g. only 4% of instances involve Monero (XMR). Instead, Bitcoin remains the coin of the realm in this shady world, with BTC used in 76% of dark market cases and ETC used in only 7% of instances.”.
Cryptocurrency Owners: How to Protect Yourself?
While there may not be much you can do about the security of cryptocurrency exchanges or platforms, you can still do your bit. For example, securing your own devices and communications between your devices and service providers can go a long way to keeping you safe.
Some of the things you can do include:
1. Run a VPN
Virtual Private Networks (VPNs) help keep you safe in two ways. They protect your identity by routing communications through secure servers. At the same time, all data is encrypted for additional protection. Always opt for a reputable VPN service provider like ExpressVPN to avoid less savoury service providers from selling your data.
2. Keep applications up to date
Always make sure that the software you use are the latest versions.
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If you’re interested in cryptocurrency past its value in utility, then you might be considering investing in some of it. Interestingly enough, investing in cryptocurrency isn’t as different as investing in any other stock for the most part.
In a one-year time span from December 2016 to December 2017, Bitcoin went from $750 to a staggering $10,000! This means that anybody who invested $10,000 in December 2016, would get back a mind-numbing $133,333 in exactly 365 days. In fact, the total market cap of cryptocurrencies went all the way up to an astounding $500 billion by the end of 2017 (source).
For example, if you’re looking to participate in an Initial Coin Offering (ICO), it’s up to you to do your own due diligence. Much like regular companies going public, companies offering ICOs will generally release prospectus to attract investors.
A good sign will be the reputation of the company doing the ICO, along with whom other notable investors are. Since these are all likely to be digital offerings you also need to be aware of whether you’re buying a slice of the company or merely some value equivalent in the cryptocurrency.
ICO vs Dot Com Burst
Investors who were around for the dot com burst also have to be aware that there is a distinction between a currency that is new and that is still under development. Developmental currencies are much higher in risk profile and the company carrying out the ICO is likely looking for funds to further develop it.
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As with many things that governments cannot control, there has been much debate over the legality of cryptocurrency in various countries around the world. Both governments and their central banks have raised various points of concern regarding cryptocurrency, but in many areas the debate is still ongoing.
In this research done by Reuters, the team has looked at governmental attitudes toward cryptocurrencies, not limited to Bitcoin alone. The picture produced across the world is patchy. Some countries have become global advocates, while others have actively banned cryptocurrencies completely, with various shades in between.
Among the concerns that they have regarding cryptocurrencies are:
- Lack of regulation
- Lack of Control
- Potential to diminish effectiveness of fiscal policies
- Crime (e.g. money laundering)
However, since each country usually has their own policies and whatnot, the status of cryptocurrency ranges far and wide. Reactions to have have fallen into a few broad categories such as;
Some countries have completely banned the use of cryptocurrency. For example, Algeria prohibits the purchase, sale, use, and holding of cryptocurrency. Egypt meanwhile has classified all commercial transactions in bitcoin as ‘haram’ (meaning unclean, or forbidden by Islamic law).
In countries such as Bangladesh and Iran, there are no regulations banning the possession, trade,or use of cryptocurrency. However, financial institutions in the county are not allowed to facilitate any such transactions.
The terms of partial bans vary widely,
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Cryptocurrency is a form of virtual currency. These Internet-based forms of currency have real-world value equivalents but do not belong to any sovereign nations. Like fiat currencies, their value depends on many factors including demand.
The biggest value seen by users of cryptocurrencies is that they are not (in many cases) regulated by any one country. This gives their users a high degree of anonymity and immunity from general acts of currency manipulation that some fiat currencies are open to.
The Cryptocurrency Ecosystem
Much like how real-word currency is circulated and utilized, cryptocurrency is similar in many ways. For example, you need to either buy or earn cryptocurrency then store it in a digital wallet.
To use cryptocurrency you will need to find a vendor who is willing to accept the currency you have. To get an idea of this scenario, imagine you currently have US dollars. While overseas, some vendors may accept that, but others will want you to convert to a currency they accept.
As a broad overview, the ecosystem consists of:
Miners – These are the ones who invest in the hardware and tools needed to produce cryptocurrency. The process is time consuming and drains much resources.
Buyers/Sellers – These are the largest groups of cryptocurrency users. They use real money to buy or sell cryptocurrency, giving them real value.
Exchanges – Similar to banks, these digital entities allow users to trade cryptocurrencies. Here, you can either exchange one cryptocurrency for another,
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