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Bitcoin and its fellow cryptocurrencies are on their way to show the world one of the biggest ironies in the field of financial technology.
These assets, widely heralded as the future of FinTech, might turn back time and go old school courtesy of holders who are paranoid about protecting their investment from the bad guys who are out there to steal their hard-earned money.
After all, if losing $2 billion worth of crypto assets is not enough to make investors scratch their head and lose hours of sleep for protection, then we don’t know what is.
Bitcoin Hacking: A Growing Menace
The year 2021 was a lucrative year for crypto hackers as they were able to steal $3.2 billion worth of cryptocurrency, according to a Reuters report.
One would think that the figure is hard to surpass, but 2022 is shaping up to be a “bumper harvest” year of sorts for these cyber criminals.
According to the 2022 Crypto Crime Report published by Chainalysis, during the first seven months of this year, hackers have taken away nearly $2 billion in crypto from exchanges, platforms and private entities.
In a way, these criminals are impressive, as while many of us are busy using our computers and the internet for work and entertainment, they are leveraging technology to outsmart Bitcoin and other cryptocurrency networks.
Too bad they have blatant disregard for the hard work of investors to add crypto into their financial portfolio.
Image: Life With Crypto
Investors of Bitcoin and other digital currencies, especially new ones, are taking advantage of “hot wallets” to start their journey in crypto trading.
These wallets may be free and offer fast and easy access to the asset class. They are, however, vulnerable to attacks.
Case in point, in April this year, 8,000 wallets containing crypto on the Solana blockchain were attacked by hackers who made off with at least $5 million worth of tokens.
This might be the reason why Bitcoin investors who are paranoid about hacks are about to turn to old tech to deal with this pressing concern.
Source: Reuters Graphics
Hardware Wallets: Old School ‘Savior’
By the simplest of definitions, hardware wallets – which first debuted in the market in 2014 – are devices that work just like USB drives. They can be used to safely stash crypto holdings offline.
One of the key advantages of this over hot wallets is that it is unaffected by viruses coming from a computer. Private keys stored in the hardware wallet won’t be in contact with the computer network, preventing unwanted access.
Image: OceanPoint Insurance
Bitcoin holders and investors of other cryptocurrencies are seriously considering turning to this “thing of the past” to safeguard their holdings from malicious cyber attackers.
Because of this, Straits Research projects that by the year 2030, the valuation of the industry, which stood at $245 million in 2021, will grow exponentially up to $1.7 billion.
With the way things are shaping up now, two things – one considered the future and the other a thing of past – will soon link up once again in hopes of thwarting the evil plans of crypto thieves.
Crypto total market cap at $882 billion on the daily chart | Featured image from Acenda Integrated Health, Chart: TradingView.com