When investors read news about hacking incidents in the cryptocurrency market that resulted in substantial loss of assets, they would often feel alarmed and threatened. Although this is a normal response, it’s not always a good habit to react impulsively. There are always two sides to the same coin, and what many investors do not know is that this problem may offer some advantages.
Yes, that’s not a joke. Some industry experts believe that hackings may push developers to tighten their security protocols. For users, the opposite of feeling discouraged might be having a more vigilant approach when doing financial transactions online.
It’s not about downplaying the gravity of such cybercrimes because it’s a serious matter. Millions of users worldwide are trusting the trading platforms that they have chosen. That’s worth more than anything else. But from a broader perspective, threats are ever-present in any business environment. When there is money involved, investors must expect bad actors to join the market.
This is also the reality in the cryptocurrency world – as the industry continues to evolve, cybercrime prevention and resolution are considered a crucial part of its development. For you to have an objective evaluation of the ups and downs of this business, read the following facts.
The Good Thing about Hacking for Crypto Investors
Investors’ immediate response to hacking attempts is always negative. Of course, this is pretty reasonable and normal. But the thing is, it also has a good side. Many companies and developers in the crypto industry are pushed back to the drawing board to examine the security implications for themselves.
When this process is done, the company may identify the serious weakness in the platform and implement necessary improvements to the system. Eventually, the incident of hacking attacks could be reduced or absolutely prevented, given the experience and solutions that have been integrated.
What Experts Think About Crypto Hackings
Hacking will always continue regardless of the technology in question. But such attacks, according to experts, will inspire evolutionary development in the digital currency space. Coins, exchanges, and companies that are not properly equipped have to deal with these threats and may lose their loyal and potential customers. It’s a competitive business environment, and the rule is always survival of the fittest.
On the brighter side, this dilemma would leave only the most secure cryptocurrencies. Undeniably, only the best platforms will ultimately survive like the ones you can access via immediate-edge.io. However, they also need to adjust their security protocols to stay on course.
The CEO of BlockStar commented that today’s hacks would become tomorrow’s security solutions. It may be a painful incident, but it could also serve as the major driver in strengthening the crypto ecosystem as it improves security measures which is a key for wider adoption.
Despite the constant hacking attempts, another crypto founder points out that there will always be people whose interests will remain for a long time. But unless the digital trading space resolves these fundamental infrastructure issues and provides investors with transactional confidence and certainty, the platform may not reach its mainstream end.
Some companies are currently initiating unique strategies to reduce hacking attempts. They offer rewards for the discovery of potential bugs and security flaws in the system. More and more developers are following the same path as it would further improve cybercrime prevention protocols.
Without strong security features in place, these entities know that stability is out of reach. Hence, emerging leaders in the crypto world are constantly striving to offer the safest and most secure platform for the benefit of users.
The Bad Side of Hackings for the Evolving Industry
Scams and hackings are not new in the industry have experienced these incidents in several instances in the past. The bad side is obvious to state. But prospective investors must understand that this is not a simple thing. There have been millions to billions worth of digital assets lost due to hacking incidents. Even today, this problem remains as more and more people follow the trend.
Experts say that hacking attacks happen because crypto exchanges are not working on secure networks. They are generally operated by blockchain technology that records financial transactions. The records on this device are secured through cryptography, and network participants have private keys for their transactions. Any alteration will make those signatures invalid and alert other users in the network to the changes.
While a blockchain can be secure, there are exchange platforms that don’t use the technology, allowing bad actors to proliferate in the system. Hence, one major reason why hacking attacks happen is because of poor security. For instance, it was reported that South Korean exchanges get poor reviews for cyber security, and officials have to impose fines on those who fail to meet the required standards. It was noted that if the exchanges want to play an intermediary role, they should be as safe as banks and strengthen their security.
How to Identify Hackers in the Crypto Ecosystem
New crypto players need to understand that tracing blockchain transactions is possible. What’s not is identifying the owners of the wallets where the digital currencies are kept. For industry experts, this is the biggest weakness of the platform since concerned authorities cannot identify the owner of the wallet. If the assets go to hackers’ wallets, there is no way to determine the personality behind them.
Some governments are now trying to make crypto transactions traceable by integrating a system that links crypto accounts to existing bank accounts that have been examined by financial institutions. But these efforts may fall short as hackers may send stolen cryptos to exchanges outside of their jurisdictions.
Nevertheless, having a secure wallet remains one of the best ways to protect cryptocurrency investments. Investors who are vigilant and prepared can also take precautionary measures to avoid falling victim to illegal schemes in the network.
There are good and bad sides to hacking attacks in the crypto industry. But it’s not always a 50-50 proportion. Some investors may come to believe that hacking can do more harm than good, while others may think the opposite way. Essentially, this will come down to experience and personal perspectives.