According to figures released by Crypto Aware, a staggering $1.7 billion of cryptocurrency has been stolen since 2011. But what does that mean? Let’s give that number some context. When you consider that cyber crime in general cost the world some $600 billion in 2017 alone, the figure seems a little easier to swallow. But it still begs the question–is it safe to invest in crypto?
It would be a fool who followed the advice of even the most bearish of investors when it comes to the crypto markets, since investing in crypto is extremely problematic. With nine in ten ICOs floundering soon after launch and a recent study reporting that 81 percent of them end up as scams–the question is it safe to invest in crypto seems to be already answered.
Blockchain – The Most Secure Technology?
Paul Brody, global innovation blockchain leader at EY rather succinctly said, “If blockchains are so secure, it’s reasonable to wonder why you keep reading about all these big hacks and thefts and criminal activities… While blockchains are themselves very secure, they operate in an ecosystem that still has many weaknesses, including human error.”
Since hearing about the “immutability” of blockchain and then realizing that there are certain circumstances in which it is not, in fact, immutable, some things have changed. Blockchain is still generally agreed to be the safest technology we have. However, it’s still in its infancy and the secondary software, like wallets and exchanges, that are used with it are vulnerable to attack.
Is it Safe to Invest in Crypto? Case in Point – Coinsecure
Oh, the irony. That Indian exchange, “Coinsecure,” should announce on its website, “We regret to inform you that our bitcoin funds have been exposed and seem to have been siphoned out to an address that is outside our control,” should be enough to make anyone think twice. Nearly $3 million were stolen from its bitcoin wallet this month, the biggest theft in India so far. This will do nothing for its floundering virtual currency market.
The exchange that has more than 200,000 users that trade daily on its platform lost more than 430 bitcoins, stolen from a password-protected wallet.
Not good news for users and not good news for the Indian cryptocurrency market, which is already on the verge of discussing a cryptocurrency ban. The Reserve Bank of India has forbidden banks to trade on cryptocurrency exchange sites and forced them to wind down all relationships over the next three months.
Other parts of Asia have also suffered damaging blows, particularly Japan, whose exchanges were subject to a colossal theft, equalling $530 million.
But if Losing Money is Scary – What About Data Theft?
If Equifax and Yahoo are anything to go by, we’ve already had a taste of what it’s like when data gets stolen. So, when we hear bold claims about blockchains holding all our information and being impossible to tamper with–what’s to stop the cyber criminals from stealing those blockchains and holding them hostage?
One thing is very clear in this new horizon. Storm clouds can descend at any moment and you have to be prepared. Is it safe to invest in crypto? Perhaps that’s not the right question anymore. “Is the technology behind it going to be regulated? And, if so, how?” may be more pertinent to ask.