The cryptocurrency market is truly taking off. More and more financial experts are recommending digital currency investments, and the price of Bitcoin, ether and other majority cryptocurrencies have absolutely skyrocketed over the past year. These factors have led many people to suggest that there has never been a better time to invest in digital currency, and in many ways, this is definitely true. Still—while you may be tempted to invest in Bitcoin or one of the other cryptocurrency giants—this might not be nearly as smart of a financial decision as you’ve been led to believe.
The Rise of Digital Currencies and Cryptocurrency Crime
The huge success of early pioneers like Bitcoin has led to an almost endless number of competing digital currencies. Many of these were extremely short-lived and often failed before they ever got off the ground. Nonetheless, there are still a wide number of well-established cryptocurrencies now on the market even if the media still tends to focus primarily on Bitcoin, ether and the other bigger ‘brand name’ digital currencies.
Of course, success always comes at a price. All that success and media attention was bound to eventually attract thieves and criminals. This is exactly what has happened, and most of the major high-profile cryptocurrencies are now frequently targeted by hackers. As a result, these cryptocurrencies are nowhere nearly as safe as their proponents would like everyone to believe.
Ethereum is the prime example of how hackers are targeting the higher-profile cryptocurrencies. Although it still remains the number two digital currency in terms of total price per coin and market capitalization, Ethereum could potentially be worth much more if hackers hadn’t already managed to steal almost $90 million worth of ether in the past year alone.
Most recently, hackers were able to take advantage of a vulnerability in Parity Wallet software to steal approximately $32 million worth of ether from three accounts. Things also could have been much worse had Parity Wallet engineers not managed to spot the theft and thus transfer around $75 million worth of ether into a secure account.
This hacking follows another incident that occurred only a week prior, in which hackers stole $7 million by tricking people to send ethers to the wrong address. Still, the biggest theft occurred around a year ago when hackers were able to steal approximately $50 million. At least we think this was the biggest theft.
No one is really sure how much money was stolen during Ethereum’s Initial Coin Offering, when hackers were able to redirect the ICO address with the result that investors sent their money directly to the hackers instead of Ethereum.
Although Ethereum has been the cryptocurrency hardest hit by hacking, Bitcoin has also had its fair share of hacking-related incidents in recent times. One prime example is the recent hacking of South Korean bitcoin exchange Bithumb. In this case, it seems that the hackers’ primary goal wasn’t to steal money, but to steal personal information. Although some users did have their money stolen in the attack, more worrying is the fact that the hackers compromised the personal data of more than 30,000 bitcoin users.
Of course, Bitcoin isn’t just a favorite target of hackers; it’s also one of their favorite tools. The recent WannaCry ransomware attacks required anyone who wished to unlock their computer to pay in bitcoins. Records show that this attack wasn’t all that successful and in total only netted the hackers around $50,000. However, security experts note that this type of ransomware hacking is becoming increasingly common. In fact, statistics now show that approximately 40% of all companies worldwide have been a victim of a ransomware attack, and in almost every case, the hacker demanded payment in bitcoins.
Investing Safely in Cryptocurrencies
Just because Bitcoin, Ethereum and the other high-profile digital currencies are frequently targeted by hackers doesn’t mean that you should avoid investing in cryptocurrencies altogether. The fact remains that the continued growth of the digital currency market means that it can definitely be a smart investment. However, it is imperative that anyone considering such an investment pays close attention to the overall security of any digital currency before deciding to sink their money into it.
In this case, more and more experts are recommending that you avoid Bitcoin and ether in order to ensure your investment is actually secure. Although there is no guarantee that your money or information will be stolen in the next Bitcoin or Ethereum hack, there is also no way to guarantee that it won’t. Luckily, the majority of the hacking incidents seem to be limited to only these high-profile cryptocurrencies, which means you’re generally much better off doing some research to find a secure, well-performing digital currency that’s not regularly targeted by hackers. BY doing so, you should be able to gain all of the benefits of investing in cryptocurrency without having to worry about any of the drawbacks.