Cryptocurrency and It’s Role in Cybercrime
Table of Contents
Digitalization is the future of our world. We are moving towards a new era of technology where everything will be digital. One can see the glimpse of the future of the digital world with cyber cryptocurrency.
Many people believe that cryptocurrency will be used as a digital currency in the future. And it is not just the assumption of some people; the popularity of crypto is increasing day by day. In March 2021, the number of blockchain wallets exceeded 70 million, according to the data of Statista.
Everyone is happy with a digital currency that offers manifold privileges over the money we use. However, there is also a bad side that is cybercrime against cryptocurrency. Recently hackers succeeded in the biggest heist of crypto and stole $600 million.
So, investing in cryptocurrency can be dangerous if one purchases it without understanding the cybercrime threats, their types, and the basic concept of cryptocurrency.
What is Cryptocurrency?
Cryptocurrency is similar to the physical currency we use in real life, but the primary difference is a virtual or digital currency based on blockchain technology.
Blockchain technology keeps the record of the data or files of each transaction. The users, or in other words, crypto miners, are the ones who manage the cryptocurrencies by creating the chain of blocks (blockchain). When someone transfers money through cryptocurrency, the miners solve a complicated mathematical puzzle to create a block. After solving the puzzle, the miner sends the block to the network, and other network miners verify the answer to the puzzle and then confirm the transaction.
The crypto is known as a “Peer to Peer” system means there are no intermediate parties like the government, banks, or anyone. All of these procedures of mining can only work with mining computers. However, to buy cyber cryptocurrency, one will need to spend real money. The owner of the cryptocurrency coin can purchase goods and services through it.
Types of Cryptocurrencies
There are some essential things that one should know before investing in any cryptocurrency.
According to Statista, in November 2021, the number of cryptocurrencies exceeded 7,000. In addition, the number is steadily increasing. Choosing crypto for investment is an uphill task because one has to choose the best option among numerous types of cryptocurrencies.
Apart from divergent cryptocurrencies, all crypto assets come under three categories. They are bitcoin, Altcoin, and token. All of these three categories are different from one another.
Bitcoin is the first kind of cryptocurrency. The developer of cryptocurrency made it replace the real currency such as the Dollar, Euro, etc. It is based on blockchain technology and operated by bitcoin miners worldwide. Every bitcoin transaction is registered in a public ledger available for anyone to see, making it difficult to deny the transaction. Bitcoin is encrypted using cryptographic technology that prevents the counterfeiting of cryptocurrency.
Altcoin (Alternative Coins)
Altcoins mean alternative coins to bitcoin. Apart from bitcoin, all other cryptocurrencies come under the category of Altcoin. For example, Ethereum, Binance, Cardano, and many more. Like bitcoin, altcoins also have blockchain technology while the miners verify all transactions by creating blocks. The altcoins are often portrayed as a better replacement for bitcoin.
While Bitcoin and Altcoin are cryptocurrencies representing money, the token represents the virtual that can be used for investment or other economic purposes. It is based on its blockchain technology. The crypto tokens act as virtual bonds, representing an investor’s stake in a company that can be used to make purchases or traded for-profits, like securities.
Top 8 Best Cryptocurrencies with Market Capitalization
Everyone wants to ensure whether their money is safe with the investment or not. The best way to learn about safety with crypto investment is through market capitalization.
Market capitalization is the total market value of a digital currency. Below we have listed the top eight cryptocurrencies in terms of market capitalization with their brief information.
Market cap – $1 Trillion
Bitcoin (BTC), the first cyber cryptocurrency, was founded in 2009 by Satoshi Nakamoto. It is built on blockchain technology, a decentralized network that is free from the ownership of one entity. Instead of one authority, the Bitcoin miners control the authority to receive and send money worldwide. Each miner who owns a high-speed computer can verify the block of transactions to generate bitcoins. This process is also known as proof-of-work (PoW).
Market cap – $572 Billion
Ethereum is the second most popular cryptocurrency, created in 2015 under the Altcoin category. It has many features that are the reasons for its popularity. For example, Ethereum allows its users or buyer to utilize “dApps” (decentralized applications). Customary applications such as Facebook, Twitter, etc., are owned and operated by a single organization. But the applications in the “dApps” runs on a blockchain network where the contents of the applications are both created and consumed by multiple participants. Ethereum is also the origin of smart contracts, which is the contract between the seller and buyer in the blockchain network.
Binance Coin (BNB)
Market cap – $108 Billion
Binance is a crypto coin-operated under the ‘Binance exchange and trade’ platform. It has become the exchange giant equivalent to the world’s largest stock exchanges combined. The platform launched in 2017. Binance is a utility token that offers discounts on trading fees, exchange fees, listing fees and more. The Binance exchange has the advantage of supporting the investment through other crypto coins such as Bitcoin, Ethereum, etc.
Market Cap – $74 Billion
Solana is a crypto coin generated by its blockchain platform called Solana. It was started in 2019 with $0.77 per coin, which is now trading for more than $200 per coin. San Francisco-based Solana Labs developed this platform to power up decentralized applications. It assures faster transactions at lower fees. The blockchain technology of Solana (SOL) is one of the fastest globally that can verify 65,000 transactions per second. The Sol can also be used as a crypto token to enable other applications such as smart contracts, decentralized finance apps, NFTs and more.
Market capitalization – $72 Billion
Initially, Tether was named “Realcoin”, which was issued for the first time in 2014. The Tether token is pegged to USD 1.00, making it a stable coin. It was developed by the crypto exchange BitFinex and traded by the USDT symbol. It comes fifth on the list of top ten cryptocurrencies worldwide with a market cap of $72 billion. Unlike other volatile cryptocurrencies, it is backed with fiat currency like the dollar. That is why it is ideal for those investors who want to invest in a stable and secure crypto coin.
Market cap – $70 Billion
It started in 2017; there are more than thirty-three million coins of Cardano in circulation. The Cardano is a decentralized network that works based on scientific and mathematical principles to overcome the drawbacks of the current blockchain network. Cardano attempts to develop a regulated blockchain to provide seamless financial services for all, unlike other cryptocurrencies. It uses the proof-of-stake (PoS) method to verify the transaction. This reduces the energy spent on mining, thus becoming a more sustainable crypto.
Market cap – $60 Billion
XRP is the native crypto coin that works on the Ripple exchange platform. The Ripple network is known to transfer money globally. It also allows its users to buy XRP coins or trade them for other cryptocurrencies. The Ripple platform uses a method of distributed consensus mechanism, where the transaction is validated by conducting a poll among the participating nodes. It saves more time and energy compared to the mining of coins. Due to this, the XRP transaction becomes faster and cheaper than other cryptocurrencies.
Market cap – $52 Billion
Polkadot is a blockchain network created in 2020, which uses DOT as its crypto. The advantage of Polkadot is that it is designed to connect with other blockchain networks.
It has two separate blockchain networks known as ‘relay’ and ‘parachains.’ The relay is dedicated for payment transaction while the parachains is for dApps. This Para chains technology is used to reduce the time and congestion in applications by using a mini-blockchain for each application connected to the primary chain. This increases the performance of the individual applications. It is the fastest-growing blockchain technology in the crypto platform.
Eight Tips to Invest in Cryptocurrency
Purchasing cyber cryptocurrency is not an easy task. There is always one question that remains in the mind of investors, which is how to invest in crypto? What are some valuable tips for investing in crypto that can be profitable?
Invest for Long Term
As of now, one bitcoin is equal to more than 65,000 USD, and the price will increase in the future. So, there is no doubt that crypto is a high profitable investment but only in the case where someone invests in long-term.If a person is investing in getting high-profit in a few months, it will not be easy since the price can go up and down in the market. Selling the coins because of not getting massive profit in a few months is a big-no of investment. It is better to invest in crypto for the long term, as it increases a high profit.
Diversify Your Investment
There are more than 10,000 cryptocurrencies, and the rate of each coin is different along with their benefits. Some are highly profitable, and some low but all of them are risky; no one can guarantee the stability of a coin. Due to this reason, investing all money in one coin is the biggest mistake in the crypto investment. As the price is highly volatile, all of the investment will be lost if it goes down. Hence, it is better to diversify investment in several types of crypto. Choose the crypto-based on their technological development and future scope. For example, Cardano, XRP, Polkadot, etc.
Do not believe in anyone. If someone says that investing money in a specific coin is profitable, do not follow the advice. Everyone has the facility of the Internet in the palm of their hand.All information about each crypto coin is easily available online. In case of having insufficient knowledge about any topic, research it, find the answers, and solve the problem. Because the only one who can take care of the investment is the owner, it is better to research the cryptocurrency for its market value, profit margin, and risk factors.
Limit the Investment
Apart from diversifying the investment, one thing remains, which is to invest carefully. Instead of investing all money, invest a specific amount in the beginning.Considering anything can happen, especially when the buyer has no experience. Think about how much investment is good and which cryptocurrency is suitable and profitable before purchasing crypto.
Hedge the Crypto Trades
It is a type of trade where the primary investment is done in the expected crypto while the secondary investment is done in the adverse crypto. If the primary crypto is headed towards the loss, the secondary crypto comes as a savior. Hedging reduces the risk and losses that occur in a single investment.
Do not Believe in Advice – Learn Strategies
Getting immense profit by following someone’s advice can be good for the short-term, but it is a bad idea for long-term investment. No one can survive in crypto experts and make a good profit without knowing the strategies as it is a topic to learn strategies of trading and algorithms.So instead of asking for suggestions, find an expert to learn the basics of algorithms and trading. Then, practice what you know and invest a small amount but with a proper strategy to get more experience.
Choose Wallets Carefully
Internet is full of frauds, and it is a truth, particularly when it comes to crypto investment. An unreliable trading app or mobile crypto wallet can be risky for investment. Since hackers can access it, steal the data, and sell it on the dark web. So, choose the trustworthy companies of crypto wallets. The crypto wallets store the private keys that make the crypto safe and accessible.If possible, visit the official sites of cryptocurrencies or some other reliable website to get information about the wallets.
Take Security Precautions
The last and most important tip is to take security precautions for the safety of the investment. Instead of using the old email address, use a new one to protect yourself. Do not open any link that a stranger sends.Use cold wallets, not hot wallets, to secure the crypto assets. The hot wallet is vulnerable because it can connect to the Internet, and the hacker can access it. On the other hand, cold wallets are devices one can carry without worrying about hacking attacks because they cannot be connected to the Internet. Hence, cold wallets are safe as compared to hot wallets.Besides, if possible, use computers for trading and transactions instead of mobile. Following all these steps can save investment by future hacking attacks.
Eight Reasons Behind the Familiarity of the Cryptocurrencies
Cryptocurrencies have been around for a while, but recently, they got much attention from people worldwide. Following are some common reasons why it is happening? Why is cryptocurrency the center of attention of all people?
No Involvement of Intermediate Parties
Cryptocurrency is the best payment gateway. It is considered a safe investment as any government or banking influences it. The political or financial situation of any specific country does not affect the value of cryptocurrency.
Easy to Use
Cyber cryptocurrencies transactions are easy to go, the maximum transactions time is super-fast compared to other payment gateways. Anyone can easily do international and domestic transactions without worrying about currency exchange rates, transaction fees, withdrawal fees, interest rates.
High-Potential of Profit
Crypto is a digital currency of the future. Anyone can purchase it at a low price and sell it for massive profit after some time. In short, owners of crypto assets can get a higher return on their investment in the future.
Charge Less Fee with Good Service
People can use thousands of payment options while purchasing goods, but they charge a high fee for their services. While the fee of crypto transactions is incredibly low; and that is the biggest reason behind its popularity. Anyone can buy any services, items and pay through cryptocurrency with minimal transaction charges.
Ownership of the Assets
The fact that the buyer is the only owner of the assets is the most significant feature of cryptocurrency. No bank or third party can close the account whether the reason is death or anything.
The most crucial thing everyone concerns about while using the Internet in the privacy of their data. In other words, nothing is safe on the Internet. Each app and website are regulated and controlled by someone. But the cryptocurrency is secure because it is difficult to hack a decentralized network.
Ease of Accessibility
In the past, people thought that cryptocurrencies were some mysterious currencies. But now everyone knows its value, and the fact is that it is genuine and profitable for all. It is easily accessible; even the person who does not know about it can understand the procedure by visiting the official website of cryptocurrencies.
Cryptocurrency as a Payment Method
Another best thing about cryptocurrency is it is getting more common in the world. Nowadays, big brands and companies are accepting cryptocurrencies payment. So, it is pretty safe to say that anyone can travel to any country and purchase goods with cryptocurrency in the future.
Cryptocurrency and Cybercrime
There is no technology that is free from cyber-attacks. Cryptocurrency plays a vital role in cybercrimes. Most of the cyber-attacks are conducted for financial benefits. One such attack is ransomware, where the hacker extracts sensitive information from the person or an organization and demand ransom in exchange for the stolen data. The hackers prefer to get their ransoms in cryptocurrencies, as it has the advantage of anonymity and easy transfer across the countries. Such crypto ransoms can be easily exchanged for real money anytime they want. The cryptocurrency has given a new phase to the dark web and its crimes.
Why Cryptocurrency is Used in Cyber Crime?
Cryptocurrency has proven to be the best payment gateway for fraudsters. Hackers also use crypto on the dark web; they sell their services and receive cryptocurrency payments. Even though crypto is a P2P (Peer to Peer) system, the payments people send through the cryptocurrency show on a public ledger, and miners verify them.
Hackers can remain anonyms because the only thing that shows on the public ledger is the wallet address, a combination of numbers and alphabets that looks like this 3GZogi49cfjq2GjdwV8byZuJJnkLtktXf5. This wallet number does not reveal the identity of the sender or receiver. That is how the feature of crypto to protect users’ identities attracts hackers, and they defraud people.
Types of Cryptocurrency Cybercrime
No one can deny that cyber cryptocurrency has many benefits and a promising future. There are countless examples where crypto investment has proven to be profitable. And all these stories of crypto success make the platform attractive to the fraudster.
Numerous hackers are always searching for weakness in a software system, defraud people. They have diverse ways of committing cybercrimes. Here are some of the most common types of cryptocurrency cybercrime.
DDoS extortion means threatening an organization or a company by telling them that they will attack their site if the company or organization does not pay a certain amount. In this case, hackers target a company and send threats to launch a DDoS attack, common in the hacking world. The hackers ask for payment through cryptocurrencies since they protect their identities.
Hacked Third Party Applications
Crypto owners use third-party applications or trading platforms, which is the easiest way for hackers to defraud people by stealing their funds. Since all applications are on centralized networks, all applications depend on a single network.
Crypto-jacking is common among cyberhackers. Everyone knows that opening a link from an unknown email or message could be dangerous. Hackers send an email, messages with a link, and when someone clicks on it, their computer or the device can be accessible to hackers. Afterwards, hackers use these computers for mining, and that is how they do Crypto-jacking.
Nowadays, protecting personal data is not an easy task. Everyone has several third-party applications on their phones, and all of these apps have access to personal data. Hackers utilize these applications to collect personal data and sell it on the dark web.
Ransomware is a type of cybercrime in which hackers attack a computer system with the help of malicious software. When someone downloads malicious software on the devices, hackers encrypt the data of crypto accounts and restrict users’ activity to the computer system. Later on, the hackers demand a certain amount of money from victims to restore their access to computers.
Methods to Protect Yourself from Crypto Cybercrime
There is no way to stop these crypto cyberattacks in the world entirely because, in the end, hackers will come with a new way to defraud people. However, it does not mean a user cannot do anything about it. Following are some tips that can help protect computer systems against crypto cybercrime.
- Do not install any application from unknown sources on your mobile. Use an authorized application platform to download apps.
- Update the applications on mobile phones and the software used in the computer system to use the latest patches available with the updated version.
- Never trust an email from an unknown person. Avoid clicking on suspicious links in such emails to prevent the system from a phishing attack.
- Enable firewall protection to the network to detect any malicious activity earlier and prevent the attack.
- Install a trustworthy antivirus program on the computer.
- Never visit any suspicious websites. Especially avoid using the website without HTTPS protocol to prevent any cyber-attack.
- Do not use an unknown USB and CD on the computer if possible. Avoid using removable devices like USB or pen drives in a secured network like an organizational network. The best practice is to format the devices before plugging them into the network system in a necessary situation.
- Use complex, strong, and different passwords for all applications. Using a password manager to generate a complex password and store it securely is better. It is better to use two-factor authentication to use confidential data.
- Do not share personal details with anyone.
- If someone sends a threat of a DDoS attack, avoid sending ransom to the hacker. Seek help from the cybercrime help center of the state.
As mentioned above, everything has two sides, good and bad. Similarly, cyber cryptocurrency has many features. It solves countless problems that people have faced before, like high transaction fees, lousy service, and the control of one entity.
However, it also has some problems in which the biggest one is cybercrime. Even though bitcoin technology and decentralized networks are safe, we can still be victims of cybercrime. That is why it is better to take precautions.