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17 Feb, 2018 07:25

You can’t invest in cryptocurrencies without fear of cybertheft, experts tell RT

You can’t invest in cryptocurrencies without fear of cybertheft, experts tell RT

Wild prices swings are not the only investment risk with cryptocurrencies. They are also likely to be stolen from your electronic wallet or personal computer, experts warn.

“In my opinion, the terms ‘cryptocurrency’ and ‘safe investment tool’ should not be used together,” Olga Prokhorova, expert at the International Financial Center, told RT. If you are using bitcoin and other cryptocurrencies as a short-term investment, the only convenient way of keeping them is to use online wallets and crypto-exchanges, she said.

“Theft of cryptocurrencies from exchanges will not stop as long as there are clear precedents of successful cyberattacks. They will motivate hackers to do similar things in the future. You should not keep cryptocurrency on the exchange – it’s not safe; everyone knows it, but people continue to do it,” Prokhorova said.

The only possible way of making sure your cryptocurrency is not stolen is the participation of banks, which have vast experience in it, but the community around digital assets hates the idea of banker participation, and digital assets are not recognized by many banks, she added.

Eldiyar Muratov, president of Singapore Castle Family Office, mentioned the major cryptocurrency thefts and closures of exchanges Mt.Gox and Cryptsy, as well as stolen funds in tether, NEM and other cryptocurrencies. According to some estimates, more than a $1 billion has been stolen in digital money in recent years.

“First of all, do not trust online services. Yes, they advertise themselves, allegedly guaranteeing the security of BTC storage or any other cryptocurrency,” he told RT.

“But the practice shows that these guarantees are not worth anything. Such services are often hacked by outside hackers, and in addition, they are often organized by fraudsters, who simply disappear when they get enough money from customers.”

It is safer to store cryptocurrency on your PC, and you should create unique passwords for each of your offline wallets. But if you forget them, you will lose your digital currency irreversibly, Muratov added.

“The point is that there is an inverse relationship between usability and the safety of BTC storage. Online storage and smartphone are convenient for permanent use. But it is online wallets that are most vulnerable to hacker attacks, and a smartphone can be easily lost,” he warned.

For more stories on economy & finance visit RT's business section