BLOCKCHAIN,
CRYPTOCURRENCY AND CYBERSECURITY
Advancement of technology and growth of Information Technology has given various new technologies and services and cryptocurrency and blockchain one of them. With the development of IT, the chances of getting robbed, cheated or breached increased to a great extent and to face those problems cybersecurity has come up in the field. Cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Ripple (XRP), Libra (LIBRA), Litecoin (LTC) and others are a new concept of virtual money and to make that secure, the role of blockchain takes place. The study aims to understand different aspects of blockchain, cryptocurrency and cyber-security and its applications, barriers and challenges of use, and others.
A cryptocurrency is a form of asset or money which is in the way of digital information. Cryptocurrencies have no physical form, and it can only be transferred from one person to another through digital interaction. The technology uses strong cryptography to make the financial transactions secure from unauthorized access (Ng and Griffin, 2018). Because of the only digital presence, security is essential for the cryptocurrency. To make the cryptocurrency secure, the system used blockchain technology to make the currency decentralized, transparent and immutable. The main advantage of using cryptocurrency is that any authority or organization does not own it. Because of the blockchain, the whole currency is decentralized, and no government or authority can take it under control. Cyber-security is all about providing security to the users whoever uses internet service irrespective of the device they use (Deepika and Kaur, 2018). Hacking, data theft, breaching privacy, unauthorized access of personal information are getting more and more common these days and here comes the effectiveness and necessity of cybersecurity.
The total cryptocurrency system is decentralized in nature, and because of that, the user does not know who handles and exchanges the money from the sender to the receiver end. The users have to power to choose or know but to blindly trust the exchanger (AZIZ, 2019). There are plenty of chances where the transaction can face poor security issues, and the exchanger can take advantage of the issue and make a profit from it. Another problem is the attack of hackers, and if it gets lost or stolen by them, there is no direct way of claiming them as there is no proper authority for the currency. Securing stolen currency is an excellent challenge for the victim, unlike for the physical currency. Another problem is that cryptocurrencies are immutable, which means if once the transaction has been logged to the blockchain lodger, it cannot be changed (Vlasov, 2017). The implementers of the blockchain can hard-code the deal, which opens an opportunity for the excessive control over the system and it somehow goes against the immutability of the currency. As the total transaction takes place via third party systems, providing thorough security throughout the transaction process makes it nearly impossible.
Cryptocurrency has now been in the market for some time, but due to lack of knowledge, idea, and clear understanding, people still have a serious trust issue on this. Because of the decentralized and immutable nature, in various countries like China, Russia, India, Vietnam, and others where cryptocurrency has been banned or declared as illegal. After the introduction of cryptocurrencies in the market, the value of these currencies like Bitcoin, Ethereum and others get a massive price hike in the market. However, in recent days, the price hike gets minimized as it receives a significant amount of popularity throughout the world. Another reason for investing in cryptocurrencies among the people is because of the highly fluctuating nature of the value of the currency (Bondarenko et al. 2019). People prefer cryptocurrencies over physical coins for private transactions. Because any authority does not control cryptocurrency, people usually choose cryptocurrencies for storing money as it is safe from any freezing of bank account, jurisdiction or government regulation or tracking.
The main challenge of adopting cryptocurrency is that people still have very wrong or limited knowledge on this matter. A proper education or understanding of the entire system and how it works can help people to gain more interest in the cryptocurrencies. The second problem for the cryptocurrency is that the total transaction is untraceable for general people, and the users do not know who acts as exchanger (Dumitrescu, 2017). As the whole system is distributed through blockchain, this is a serious vulnerability present in the entire system. To make the whole transaction secure, the methods which are used in the process, all have to be highly reliable. Keeping the backup of the key, protecting the users, keeping the user’s saving offline, and other activities can make the overall transaction process secure from any cyber threat.
The main social benefit of using cryptocurrency is that it is decentralized, which gives users freedom in keeping the money with them. Because of this nature, cryptocurrencies are also free from bureaucracy, corruption and hierarchy. Another advantage of cryptocurrency is that it is swift and global, which means offshore transactions are straightforward. The users do not have to pay extra government tax or currency exchange costs (Bunjaku et al. 2017). Though this is security, these are several cases where a considerable amount of currency has been stolen or hacked from the exchange. Poor security and lack of knowledge make the total system more vulnerable.
Though the currency has been in the market since 2009, there is still a lack of knowledge and understanding present among people. From the above study it has been concluded that, though there are several drawbacks, the future of the cryptocurrencies is bright. The cryptocurrency is getting more and more popular among the general people throughout the world with time. Development of these kinds of technologies has pushed the technological market to come up with various new security ideas and solutions. Untraceable money transfer, free from government and conversion charges, global presence opens great opportunities for the cryptocurrencies for the future generation.
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Deepika, P. and Kaur, E.R., 2017. Cryptocurrency: trends, perspectives, and challenges. International Journal of Trends in Research and Development, 4, pp.4-6.
Dumitrescu, G.C., 2017. Bitcoin–a brief analysis of the advantages and disadvantages. Global Economic Observer, 5(2), pp.63-71.
Ng, D. and Griffin, P., 2018. The wider impact of a national cryptocurrency. Global Policy, p.1.
Vlasov, A.V., 2017. The evolution of E-money.