Cryptocurrencies have caught on in a pretty big way over the course of the last several years. However, there are still plenty of people who haven’t bought in, and some of the common reasons for this concern trust and security. From individuals to financial institutions, to governments, there’s a feeling that the supposed inherent security of cryptocurrencies just isn’t reliable. And even where new and emerging cryptos are concerned, there’s little faith that the kinks have been ironed out. Case in point, Facebook’s long-awaited crypto offering already has a trust problem.
All of these concerns are understandable. There are established cybersecurity threats associated with cryptocurrency, from wild value fluctuations driven by disproportionately powerful influencers, to breaches in crypto wallets and exchanges, to relatively common scams (like crypto-jacking and ransomware). And even aside from these, cryptocurrency is new! Even if we assume it’s generally secure most of the time, it’s easy for people to have misgivings about something unfamiliar.
That said, cryptocurrency isn’t an all-or-nothing proposition either. You don’t need to simply decide whether or not you trust it, and let that be that. There are ways to handle and invest in cryptocurrency in ways that protect you from most security threats.
Don’t Pay Unknown Recipients
As mentioned, ransomware is among the common cybersecurity threats associated with cryptocurrency. This is a difficult sort of hack, which traditionally involves the files on a device being encrypted by a malicious entity — only to be unlocked if an untraceable cryptocurrency payment is provided. It’s a sophisticated issue, and one it’s difficult to stop. But there are also less sophisticated scams via which unknown entities will simply ask for cryptocurrency. They may claim to offer a service; they may claim to be in desperate need; or they may claim to have information of yours, effectively attempting to leverage you into supplying a payment. These threats need to be taken on a case-by-case basis, but the easiest way to avoid them is to establish a firm policy of not paying unknown recipients with cryptocurrency. It sounds simple, and it is. But setting this policy in place consciously is still wise.
Invest Without Purchasing
If you’re curious about cryptocurrency from an investment standpoint, but you’re unwilling to trust the various wallets and exchanges at your disposal, you can take advantage of a trading method known as “contracts for difference.” This is a method that allows you to invest in the value of cryptocurrency without ever having to buy, store, or sell it on your own. In short, trading cryptocurrency CFDs is investing in an idea — specifically, the idea of the crypto asset in question gaining or losing value. Without ever holding the cryptocurrency, and thus without exposing yourself to cybersecurity risk, you can set up a CFD with a reliable trading platform and profit simply by choosing the right direction for an asset’s value to move in overtime.
Review Exchanges & Wallets
If you do decide to acquire your own cryptocurrency, either to spend or store as an investment, you’ll have to place some trust in an exchange (where you purchase the cryptocurrency) and wallet (where you store it). Unfortunately, there is no way to fully guarantee that your chosen wallet and exchange will be invulnerable. Issues arise, and in theory, any wallet or exchange could be compromised. However, due diligence is still worth something. By reviewing your options carefully, and reading up on security measures and any past issues, you can reassure yourself that you’re picking the most secure platforms available.
Explore Crypto Debit Cards
As you may have heard, it is now possible to load crypto funds on a debit card, so long as you’re using the right service and a compatible card. This is not a complete workaround of crypto exchanges or wallets, given that you still need to load the cryptocurrency from a digital source. But it’s still a method that some users feel more secure about because they don’t need to access their crypto wallets and conduct direct transfers on a regular basis. Instead, they can simply swipe debit cards to spend cryptocurrency.
There are still some risks associated with these ideas, as there are with most financial dealings these days. But in taking these approaches, it is possible to spend, manage, and invest in cryptocurrency without making yourself vulnerable to the bigger known cyber threats.
Donald Korinchak is a Cybersecurity Professional in the Washington DC area. Donald holds an MBA from the University of Pittsburgh Katz School of Business. Donald is considered a thought leader in business, leadership, and cybersecurity issues.