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- Scams in the cryptocurrency market have increased to the extent that private details of transactions are being revealed with ease
- Small tokens having almost nil value are deposited in digital wallet to gain access to crucial information regarding the customer
- Several forms of cyber attacks have come to the foreground as regulators continue to debate as to the extent of regulation required
It is common to hear that dust has accumulated on a particular non-living object that could potentially harm its usage and efficiency. However, digital wallets are now prone to such damage as hackers want their share of excitement and fun. Decentralised Finance (DeFi) has several loopholes that need to be plugged. Hackers send small tokens to digital wallets to gain access to transaction history to steal cryptocurrency.
Hackers, scams and the inevitable
Little did we know that a second user could gain access to digital wallets just by sending small amounts of digital currency. These small units are coined Satoshi and unknowingly accumulate at the bottom of a user’s digital wallet. It becomes impossible for regulators or watchdogs to trace its source leading to theft of digital currencies.
Moreover, scams have risen that assures exorbitant profits to investors via Bitcoin or other cryptocurrency but run away with their money. The large network of computers around the world function in tandem to keep the blockchain network secure and efficient. However, it cannot prevent illicit activities carried out to harm investors and traders alike.
Prevent scams and be more alert
Users are advised to mark the tiny tokens as ‘Do Not Spend’ to prevent crucial information being divulged to third party sources. Investors need to know that the asset class is highly volatile and there are no guaranteed returns. The asset class is decentralised and creates a unique code called public key to store the transaction details.
User information is not stored on the network to prevent privacy encroachment. Bitcoin is built on the blockchain network, which in its nascent stage was private and secure. However, calls for regulation have increased as more authority bodies are trying to regulate it in some form or another.
Security and privacy are the two most important things an investor is concerned about when entering a market that is as dark as cryptocurrency. Digital wallet holders need to be aware of dusting attacks and other security threats like ransomware, cryptojacking and phishing.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
