Even though cryptocurrencies tend to attract a lot of positive attention, there are some worrisome trends in this industry as well. With over $1.7 billion worth of cryptocurrencies having been lost or stolen since 2011, it is evident there is a lot of work to be done. Turning this situation around will prove to be challenging in many ways, though.
The Issues With Cryptocurrencies
It has become painfully evident that vast amounts of cryptocurrency have been lost in the past few years. More specifically, there have been numerous hacks, thefts, cyber attacks, and sheer mistakes which cost people a lot of money. According to Crypto Aware, close to $1.7 billion has been lost since 2011, which is a rather worrisome amount of money.
It is important to keep in mind that we are not talking about $1.7 billion worth of Bitcoin. This amount also includes various altcoins which were stolen through various hacks and thefts. Some of the more notorious examples include the recent Coincheck hack as well as the Mt. Gox fiasco, The DAO, and Bitcoinica. It is believed all of these losses, which span currencies including Bitcoin, Ether, Litecoin, NEM, USDT, Nano, and XLM, add up to $1.7 billion.
One may notice that this list mainly seems to include cryptocurrencies with higher market caps. That is only normal, as criminals will look for currencies with high values and decent liquidity in order to cash out the stolen funds as quickly as possible. Unfortunately, there are also a lot of smaller coins which have been subject to theft throughout the years, and they are not necessarily included on the list produced by Crypto Aware.
Even so, it is evident something will need to change in this regard. Centralized exchanges and trading platforms will always remain a point of weakness in this industry. Theft can only occur when a third-party service provider or the end user doesn’t take sufficient security precautions. While the latter aspect also needs a lot of work, it is evident that exchanges have their work cut out for them as well.
Positive.com’s Cyber Security Resilience Lead Leigh-Anne Galloway commented:
Every player in cryptocurrency, from the largest exchanges to the most humble ICOs should take these findings as a giant warning sign to look internally at their own security. ICOs, in particular, should not consider themselves an unlikely target. The reality is that, the second a company goes public with an intention to do an ICO, it is waving a huge flag to cyber criminals that it is both valuable and also in a very vulnerable phase of its company growth.
If everyone had taken basic practices into account, a lot of these cryptocurrency thefts would have been avoided. Every piece of code utilized in a project – be it an ICO, smart contract, exchange, or wallet – needs to be reviewed thoroughly and independently before using the product or releasing it to the public. Unfortunately, that is an unwritten standard which most companies don’t adhere to as of right now.