Virtual currencies, or cryptocurrency as they are commonly known, face some daunting security challenges, such as the safety of wallets, double-spending, increased vulnerability to strategic attacks on exchanges and concerns of ruthless miners.
Wallet Safety
Research shows weak spots in hardware wallets can be exploited, even the heavily encrypted hardware wallets can still be vulnerable via a loophole. Scientists successfully intercepted communication between the wallet and PCs, affecting privacy of users since funds were easily diverted to different accounts.
Cyberattacks
After the 2014 Mt. Gox hack, the cybercriminals made off with 850,000 Bitcoins, which at today’s value would be $7.2 billion. Recovery from such an attack is near impossible. Other cryptocurrency exchanges remain under threat. Repeated DDOS attacks continue to plague some of the major cryptocurrency exchanges.
Dishonest Mining
When some mining pools become powerful enough to command significant mining ratios, they may engage in selfish mining.
Also called block withholding, it refers to a pool using their computational power to mine a block and then hide it from honest miners instead of sharing it the new block with the network.
Double Spending
Attacks that provide access to using the same coin twice in the same transaction Is called double spending. Large exchanges like Bitcoin are becoming sturdier against such violations.
51 Percent Attacks
When a pool becomes so powerful that it can command over 50 percent of the mining power, it then poses a threat to the cryptocurrency network. It’s a security concern that’s not easily carried out; however, if a group gets such power, it could manipulate transactions via mining invalid blocks or by double-spending. Reliable miners usually remain more discreet to avoid this issue, so the 51 percent attacks are less likely to occur.
Every need for security is unique and that’s why we encourage our clients to meet and discuss major concerns. Safety and security is more important than ever these days, so stay ahead of issues and prepare for the unexpected.
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