It’s a good time for the ecosystem…

While blockchain technology and cryptocurrency have been around since 2009, it wasn’t until more than a decade later, in 2020, that people started to realise its true potential in business transactions and the daily lives of the common man. Until then, cryptocurrency was more obscure than mainstream, with most of its users being specific technology enthusiasts in a niche market.

Fast forward to 2020, and people are locked inside their homes due to the coronavirus pandemic. Amongst many other things that defined the year, Bitcoin — the most popular and most prominent cryptocurrency, became an investor favorite almost overnight. And it wasn’t just Bitcoin; Ethereum, the second-largest cryptocurrency, was also at its peak.

With increased popularity and support from online payment companies like PayPal and Venmo, Bitcoin and other cryptocurrencies are ushering into a new era. Not only have their values skyrocketed, with Bitcoin being dubbed the “new gold,” but they are also increasingly recognized as legitimate forms of currency and digital assets by various governments across the world.

In 2021, Coinbase, one of the popular cryptocurrency exchanges based out of the US, got a listing on the Nasdaq Stock Exchange, making this a significant milestone in the history of cryptocurrency.

… but major crypto attacks have happened before

The increase in the popularity of cryptocurrencies has also increased their vulnerability to crypto hackers around the world. In 2020 alone, several cyber-attacks and digital heists resulted in significant sums of money and consumer data being stolen. It is worth noting here that 2020 was not the only year that saw some major crypto thefts. Ever since its inception, the cryptocurrency ecosystem has seen many breaches in its security.

In as early as 2011, when the crypto market was still taking baby steps, the first major crypto attack occurred when approximately 25,000 bitcoins were stolen from Allinvain, a member of the BitcoinTalk forum. Just a week later, Mt. Gox, a Japanese Bitcoin exchange, was the target of a more extensive cyber-attack that resulted in the theft of 80,000 Bitcoins.

A few years later, in 2016, Hong-Kong based cryptocurrency exchange Bitfinex was subject to a crypto attack where almost 120,000 Bitcoins were stolen. Some of the more recent attacks include a hot wallet breach in 2019, in which nearly $30 million in tokens were stolen from Bithumb, South Korea’s largest cryptocurrency exchange. Coinrail, Bithumb’s competitor, was also hacked, with approximately $37 million in stolen digital currency.

Other major crypto attacks that shook the world include the Bitgrail hack, in which $195 million worth of cryptocurrency was stolen from the Italian-based exchange in 2018. In the same year, Korean-based exchange Zaif also lost a whopping 60 million dollars from its hot wallets.

Although these are only a few of the more notable crypto hacks, smaller cyber-attacks continue to occur daily. When you look at the bigger picture, you can see that as much as $4 billion in digital currency was stolen in 2019 alone. Almost half of this figure was stolen the previous year in 2018.

Even as cryptocurrency exchanges have grown in popularity day by day and become increasingly complex with their security systems, these cybersecurity issues still need to be taken with more seriousness than before.

The impact of crypto attacks

Crypto hackers are more ambitious and persistent than ever before. The most recent trend in digital heists has been using other people’s computers to mine cryptocurrency through malicious ransomware. The rise in malware incidents has been directly proportional to the rise in cryptocurrency’s popularity.

Since the global cryptocurrency market is projected to increase exponentially on all metrics — trade volume, value transacted, etc — every small hack matters because it not only shakes the trust and confidence of existing and potential cryptocurrency users but also affects cryptocurrency prices.

Almost every crypto attack happens not due to a lack of security in the cryptocurrency itself. Rather most of these attacks stem from the vulnerabilities in crypto exchanges. With cryptocurrency and crypto exchanges still being unregulated in many countries, there is really no jurisdiction over the market as well. The greater the commercial operation and profitability of an exchange, the more vulnerable it is to these crypto hacks.

The crypto industry appears to have a promising future in the coming years. Several banks have entered the market as key players, and cryptocurrencies would be used more often in day-to-day transactions by everyone.

However, cyber-attacks over the years serve as a warning that if crypto exchanges do not implement adequate security measures to avoid breaches, it will inevitably lead to a massive downfall. As users of cryptocurrency, each individual needs to do thorough homework before investing in any crypto exchange.

Keeping your data and money secure: The Giottus Way

Giottus, India’s top-rated cryptocurrency exchange, is setting the standard for security and compliance with regulatory requirements in India. Whether you want to buy, sell, or manage your crypto portfolio, Giottus is the place for you.

With cold wallets that are 100% secured by insurance, you can be assured of the safety and security of your investments. Cold wallets are physical storage of cryptocurrency. Unlike hot wallets that are digital, connected to the internet, and less secure, cold wallets operate offline and are hence less vulnerable to attacks.

Indeed, recent attacks and security breaches have made many users hesitant to invest in cryptocurrency; however, Giottus, with its military-grade security, is unquestionably a game-changer in the industry.