The Impact of Cybercrimes on Cryptocurrency

The not-so-good: cryptocurrencies also create a veil of anonymity that creates many problems, particularly concerning cybercrime. Cryptojacking might seem like a harmless crime, since the only thing ‘stolen’ is the power of the victim’s computer. But the use of computing power for this criminal purpose is done without the knowledge or consent of the victim, for the benefit of the criminal who is illicitly creating currency. As a large number of infected devices generates a huge amount of cryptocurrency, cybercriminal see this as a lucrative crime.
They can attack any business and ask for ransom in digital currencies as this form of cybercrime is untraceable, and no evidence leads back to the perpetrators. With cryptocurrencies spreading across the business world, cybercrime has become a real threat. Cryptojacking is a type of cybercrime where a criminal secretly uses a victim’s computing power to generate cryptocurrency.
The increasingly egregious role of cryptocurrencies in cybercrime has prompted several official authorities to call for global crypto regulation and restrict their use. Cybercriminals can unknowingly use your computer to generate cryptocurrency Over the past decade, other fully anonymous cryptocurrencies have also started to emerge. Unfortunately, these developments are likely to lead to a surge in cybercrimes.
While cryptocurrency might be the dawn of a new age, it also has its counterpart that’s not so popular – cybercrime. It comes in many forms, from ransomware to email scams. The truth is, cybercriminals love laundering money and scheming businesses using cryptocurrency scams. The Federal Trade Commission (FTC) states that one of the biggest signs of a cyber scam is when a cybercriminal asks an individual or company to pay by cryptocurrency. Whenever there's a request to pay by gift card, wire transfer or cryptocurrency, it's a major red flag that you're about to fall victim to a cyber attack. Once the scammer is paid in one of those ways, it becomes nearly impossible to recover the money. Cryptocurrency can be mysterious, complicated and confusing to many people, and as it continues to grow in popularity, so does the opportunity for crypto scams. The FTC reports that between October 2020 and May 2021, Americans lost over $80 million to cyberattacks on cryptocurrency.
The decentralization of cryptocurrency is an excellent opportunity for cybercriminals. Cybercriminals can hack into cryptocurrency trading platforms and steal funds. Cryptocurrency is already the most preferred form of exchange in cases of ransomware attacks. Summary: The rise in popularity of cryptocurrencies like bitcoin has led to new cybersecurity issues, such as the recent ransomware attack on the Colonial Pipeline. This article looks at some common cryptocurrency scams and why businesses should ensure they have a cyber insurance policy to stay protected from these and other cyber attacks.
Cryptocurrency is a digital or virtual asset designed to work as a medium of exchange that uses cryptography to secure its transactions and to control the creation of new units. Cryptocurrency is decentralized, meaning it is not subject to government or financial institution control. Cybercrime is a type of crime that involves the use of computers and telecommunications to commit crimes such as fraud, identity theft, and theft of intellectual property. Many crimes involving cryptocurrencies are motivated by the desire to gain financial benefits. The impact of cybercrime on the cryptocurrency market has been controversial. Some have argued that cybercrime has had a minimal impact on the cryptocurrency market, while others have claimed that it has had a significant impact. The emergence of cryptocurrency and cybercrime has raised concerns about the security of cryptocurrencies and the accuracy of data provided about them by virtual asset exchanges. Cyber threats to cryptocurrency are widespread and increasing in frequency.
Cryptocurrency or cryptoasset is understood as a “decentralized, distributed, convertible virtual currency, mathematically based on a complex algorithm and that uses a cryptographic system to ensure the integrity of the transactions of the system on which it is based. As a general rule, there is no control system, central bank, or centralized storage, since it uses decentralized, shared, and synchronized networks” (Hancock and Vaizey 2016). The functioning of cryptocurrencies is based on a system of public and private keys that serve to carry out transactions reliably and securely, and each transaction must be signed cryptographically (Marrero Travieso 2003). Security is guaranteed and most of them make use of blockchain technology. Cryptocurrencies allow users to transfer value directly from one to another without having to resort to an external intermediary, thus bypassing the banking system (Palomo-Zurdo 2018). Blockchain is the basis or support for cryptocurrencies, and especially for Bitcoin; its concept refers to a database in which each user, with each transaction he/she executes, issues information that is aggregated in data blocks (Corredor Higuera and Guzmán 2018; Parrondo 2018). Unlike the banking system, in which there are intermediaries, with blockchain, which replaces traditional financial institutions, we are faced with a secure, transparent, and decentralized system, in which there are no intermediaries or supervisors (Parrondo 2018). The blockchain is a system that verifies and records the operations of a cryptocurrency, decentralizing the entire management. One could say that it is a digital ledger, which ensures the integrity of its contents (Argañaraz et al. 2019). The blockchain operation scheme is shown in Figure 1.
A cryptocurrency is an electronic form of a digital asset or money that operates as a medium of exchange. It’s a form of electronic payment that uses cryptography to provide additional security when making transactions. A cryptocurrency is a tradable digital asset or digital form of money, built on blockchain technology that only exists online. Cryptocurrencies use encryption to authenticate and protect transactions, hence their name. There are currently over a thousand different cryptocurrencies in the world.
Cryptocurrency is defined as a type of unregulated digital money which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community. According to CoinMarketCap website,Footnote 1 accessed in February 2021, nowadays there exist more than 3,207 different types of cryptocurrencies with market capitalization. Bitcoin and Ethereum are at the top of the market capitalization list.
Cryptocurrency is a peer-to-peer version of electronic cash, implemented though digital signatures, that allows online payments to be sent directly from one party to another without a financial institution. Today, cryptocurrencies are largely accepted because they allow members of society who could not open a regular bank account to participate in financial transactions via an internet-based altcoin account operable from any smartphone.
The crypto encyclopedia defines cryptocurrency as digital currency in which encryption techniques are used to control the generation of units of currency and verify the transfer of funds, operating independently of one single central unit. It is a distributed ledger technology (DLT), a technology based on the principle of distributed ledgers, that is a digital system recording and storing data and which is consensually shared and synchronized across a geographically spread network across multiple sites, institutions and/or geographies.
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