With the rise of new technologies in the past decades, our lives have changed in more ways than we could imagine. Social media, video games, access to information, new methods of communication, new work possibilities, the list goes on and on. For better or for worse, every aspect of our lives has been touched by the internet somehow. In this article, we will focus on bitcoin and how hacking the bitcoin market can harm investors.
Economy and money matters are not an exception. You can now pay or get paid by anyone from across the globe in just a few moments, internet rumors can affect the price and worth of shares of stock of any company, and a digital currency that can be used to buy goods and services – cryptocurrency – plays a significant role on the internet now. One could say we are living in the future.
Regarding cryptocurrencies, while they might seem confusing at first, they are just a form of digital money, with their market, worth, and ways to use it. Even the people who do not know anything about them have probably heard of the most famous one – Bitcoin. You could say it is the dollar of digital currency, as recognizable as the US money.
However, more than 6.7 thousand different cryptocurrencies circulate and be traded publicly, some of them bringing people profit, some of them not so much. While investing into and dealing with a cryptocurrency might seem like a great way to quickly earn good money, it is risky to the point where it is almost gambling. Yes, just like in real life, when it comes to a stock exchange, for example, it is much more skill than luck. However, there have been many unfortunate cases where a person invested all of the money they had into a cryptocurrency, only to be left with nothing.
The fact that cryptocurrencies are gaining in popularity, of course, attracts thieves. Just like in real life, some people will try to steal the (digital) money for themselves. Instead of running into a bank with a mask and a gun, they will sit in front of their computer and attempt to hack the market and the people.
One research shows that, between 2013 and 2017, 1.1 million bitcoins were stolen. While that might sound like a considerable number in itself, that information becomes much scarier when you realize that, with today’s value of Bitcoin, the heist was worth around $44 billion.
Cryptocurrencies are vulnerable to cyberattacks as most try to control the private keys of the customers. To prevent the hacking, many users have started using Bitcoin wallets, using some type of cold storage system to keep their keys offline. The number of Bitcoin wallets being used jumped from 8.2 million to 35 million in just a couple of years, from 2013 to 2016.
Of course, Bitcoin is not the only cryptocurrency attacked. It could be said that the attacks are often contagious, shooting one currency after another, such as seems to be the case with Bitcoin and Ethereum.
One possible explanation for that could be that the hackers are trying to control the market by shifting the public focus from one currency to another after one suffers many attacks. However, it does not seem to be working, as there seems to be no connection between the uncertainty that the attacks cause and the actual price of the currency.
A big issue that has been highlighted by the cyberattacks on cryptocurrencies such as Bitcoin is that the crypto markets do not seem to be very good at processing and pricing in the theft of Bitcoins from people. The currencies are especially vulnerable since the market both stores and trades virtual currency.
Thus, it is essential to make the security of the cryptocurrencies a priority and invest in preventing hackers from successfully stealing money because that’s what it is, from people. Cryptocurrencies can have a bright or a dark future, and while many factors will decide that, security and reliability will undoubtedly play a significant role.
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