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 Cryptocurrency

 

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Most people, who know me, know I love action movies. Thus bank heists fit right in to my genre of films.  Whether it is Point Break where the leading character disguises his face as one of the United State Presidents or Inside Man, a brilliantly executed hostage situation, or Swordfish which steals money through hacking into a mainframe, or Firewall, where Harrison Ford, designing what he thought would be a theft proof IT system for a financial institution, or one of my favorite movies, Live Free or Die Hard, where the thieves take down part of the electrical grid, which diverts attention from their real job, breaking into the NSA facility to steal the nation’s entire personal and financial records.

I enjoy Bruce Willis movies, and I often joke that Live Free or Die Hard stole my master’s thesis, which was written about protecting the electrical grid in the United States and the possibilities of financial theft in the event that our electrical grid was breached.

So what is the next plot line? I believe we are about to see an explosion in our interaction with cryptocurrencies. What are cryptocurrencies?  Many of us have heard and even have used Bitcoin, but there are many other cryptocurrencies such as Ethereum, Ripple, and Namecoin.  In fact, there are greater than nine hundred cryptocurrencies presently today.  Cryptocurrency is a decentralized digital payment system, meaning peer to peer transactions without a client or server.

The first digital currency was Bitcoin, which was created in 2008, released publically in 2009 by Satashi Nakamoto, a pseudonym. To this day, the identity of Satashi Nakamoto is not definitively known.

Ethereum, a rival of Bitcoin, is an open source platform technology that allows for easier programming for developers. While there are some differences between the two technologies, Ethereum, has become the second largest cryptocurrency after being live for only a couple of years.

Presently, Ethereum is backed by major financial institutions and tech firms such as Microsoft and Intel. Out of the nine hundred plus cryptocurrencies, Bitcoin and Ethereum, have a very good chance to take over traditional banking and are already supported by the International Monetary Fund, IMF.  According to the managing director of the IMF, Christine Lagarde, “Bitcoin and cryptocurrency have as much of a future as the Internet itself. It could displace central banks, conventional banking, and challenge the monopoly of national monies”.  https://fee.org/articles/imf-head-predicts-the-end-of-banking-and-the-triumph-of-cryptocurrency

Which brings us to our next question, is cryptocurrency legitimate and will it be used to replace the United States dollar in favor of a global currency? Yes to all of the above!  While cryptocurrency has had its’ fair share of critics, it is a legitimate source of payment.  As major businesses start to not only get behind the digital currency but support the technology, you will start to see a growth in legitimate decentralized payment systems which will lead to the global currency.

However, while cryptocurrencies are legitimate and are being recognized as such, we likewise see a rise in interest with cyber thieves; leading us to the next question, are cryptocurrencies secure?

Since cryptocurrencies are decentralized the point of attack would not be a masked gunman, holding a bank teller at gunpoint, but identities can still be stolen and I think we are only beginning to understand the possible attack vectors that may exist.

Take for example a recent story of a person who sold all of his stocks and bought on Coinbase, (a platform to buy, store, and sell digital currency), Bitcoin and Ethereum. Both digitally currencies had risen in the market extensively since his purchase.  However, he received a phone call from his cellular provider that they were switching his phone number to another device.  While he told the provider that this was not at his request, and attempts were made to stop the transfer of his phone number, it would be too late.  He ran to his computer, logged into Coinbase, only to see his wallet being emptied in on his screen.  In less than five minutes, his life would change, and his Coinbase wallet, would be cyber robbed.

All the movies above are directly related to what we address daily in the cyber world. Whether we are masking our identity, holding our data hostage in ransomware, or hacking into institutions to steal money, we know that cryptocurrency will have the exact same issues to address, as traditional banks and institutions do today.

Will it be as exciting to see a favorite actor walking in on a movie villain, who has just hit the Enter Key? No, clearly not; but as the financial world continues to evolve and embrace cryptocurrencies, I am afraid that the future of action movies hangs in the balance, along with our paper currency.  Stay safely Connected.

 

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