Blockchain is cryptographically secure with immutable records and continues to gain more users and funding from venture capital, startups and big players. Evolutionary lessons learned from pioneering Generation 1 blockchain technology, used for Bitcoin, help improve Generation 2 technology used in Ethereum. Bitcoin technology was primarily designed for cryptocurrency in financial transactions. Ethereum adds more powerful features to support smart contracts.
Cryptocurrency exchanges are platforms where investors and speculators can buy, sell and trade popular digital currencies. It is known that many of these exchanges and their customers do not follow strong security and risk management practices. The problem is not with blockchain security, it is with weak and negligent cybersecurity policies and practices by exchanges and customers, allowing hackers to exploit soft targets.
The news story is about a security breach at a little-known exchange in South Korea. Customers will learn to seek exchanges using strong security practices, and to use USB hardware wallets such as Ledger Nano S or Trezor One to store private keys, and to not store keys online. Dashlane, a well-known producer of password manager software, recently did a survey of account security at 35 popular cryptocurrency exchanges. 70 percent of exchanges leave users’ accounts exposed to fraud and financial theft due to “unsafe password practices.”
Some well-managed exchanges are known for stronger security practices including two-factor authentication and requiring strong passwords and have not suffered attacks from hackers. One well-known exchange includes an insurance policy that covers losses resulting from a breach of physical security, cyber security, or employee theft. When not invested in cryptocurrency, customers can move funds into cash accounts covered by FDIC insurance, up to $250,000.
Colorado just passed Senate Bill 18-086 to authorize and encourage state agencies to use blockchain distributed ledger technology to protect state records and to encourage colleges to include classes on blockchain, distributed ledger technology and cybersecurity for workforce development.
I am adding content and support for blockchain and digital currency to my website. There are now online directories showing locations of Bitcoin ATMs and local businesses that accept Bitcoin. A growing list of major businesses accept Bitcoin. There are business opportunities for blockchain entrepreneurs. |
