Cryptocurrencies are the same as electronic money (like WebMoney or PayPal), which means that they also have the same problems as standard electronic payment systems.
However, problems are likely to arise because of the specific operating principles of cryptocurrencies. These are more disturbing. Besides, these same principles are also responsible for some unique risks in cryptocurrencies.
Forgery of payment and phishing information
We will start with joint problems, such as conventional theft. Let’s say you’re going to transfer money to a friend. Copies precisely the address of your wallet, but the malware replaces it in the clipboard by another address. Not all users are attentive and double check after copying an address, especially if it is too long.
- There may also be a case of phishing. With regular electronic money, users can be tricked into accessing a phishing website and entering the access data to their purses.
Of course, users of a traditional banking or payment system can also fall into the clutches of cybercriminals. However, with a conventional method, we can always cancel the transfer. In the case of cryptocurrencies, a complaint must also be made to the United Nations. What happens in the blockchain, stays in the chain of blocks.
Hacking a payment gateway
It turned out that the hackers used social engineering methods to convince the hosting provider that they were the real owners of the domain and, after gaining access, they began to intercept the money.
Luckily, the strategy used by the hackers was not the best, as they replaced the name of the beneficiaries immediately and could only steal $ 300,000 in a few hours. If they had collected the purses and waited a bit, they would not have detected them so soon and the damage inflicted would surely have been much higher. Visit https://www.amarkets.com/about-amarkets/contacts-new/ for knowing more about it.
To be fair, excellent financial services can also fall into that kind of attack. For example, this year in Brazil, hackers were able to hijack an entire bank.This error is not relevant in Bitcoin thanks to its integrated address validation system. However, Bitcoin may be the case sending money to a mysterious recipient. How would losing 800 bitcoins affect you (at the change of September 28, 2017, about 3.2 million dollars)? Or, without realising it, you could pay a fee of 80 bitcoins. (about $ 320,000) Such errors are unlikely with a popular Bitcoin client; in those cases, the users surely used home applications.
Loss of a purse file
There is another typical problem of cryptocurrencies: the loss or theft of a purse. Many users save their wallet files on their computers so that they may lose it due to malware infection or hard drive failure.Therefore, many advanced users make backup copies of their secret code and buy USB wallets, but few do.