Offering Support for the New Trend of Crypto-Currency
Virtual currency is picking up steam, and with that security issues are growing as well. While many issues with traditional internet systems (banking, credit card and fund transfer systems, etc.) are averted by the way virtual currency is structured (which gives it a great advantage), security will always be a concern.
Where bleeding edge advances include money or gain of any sort, hackers will cleverly find ways around controls put in place to stop them. With the game afoot and so much at stake, service providers and virtual currency stakeholders must step up and proactively manage the risks of their organizations and the community as a whole. We believe there is a better way to approach this challenge and embrace the great opportunity to ‘shock the world’ that is upon us.
Society is always taken by surprise at any new example of common sense. - Ralph Waldo Emerson
Currency, at its base, is simply a mechanism to transfer value from one product or service to another in a more liquid way. As most currency is fiat based, i.e. not backed by anything but trust, could there be a way that technology better ensures that trust? Looking around at today’s world, common sense says of course. If there’s a better way, and enough at stake, mankind is going to make it happen. Crypto-Currency, or Virtual Currency, is a new wave born out of the opportunity to free ourselves from the destructive powers of government manipulation.
There are three eras of currency: Commodity-based, Politically-based, and now, Math-based. – Chris Dixon, Technology Investor
Virtual currency is designed around the idea of a new form of money that uses cryptography to control its creation and transactions, rather than relying on central authorities. It is actually a long string of numbers and letters that can be sent over the internet without going through a bank. As governments and the banking institutions that control the world play with rates, organized fraud, and bailouts that do nothing for the common person, virtual currencies offer a different path. Thus, virtual currencies can be used in lieu of a government-issued currency to purchase goods and services in the real economy.
Right now Bitcoin feels like the Internet before the browser. – Wences Casares, Entrepreneur
Bitcoin is one of the first implementations of this concept. It is open-source; itsdesign is public, nobody owns or controls Bitcoin and everyone can take part. It has the potential to be the most stable currency in the world and already represents over $1.3 Billion USD. Bitcoins were started in 2008 by a mysterious developer or developers known as Satoshi Nakamoto. Nakamoto posted a white paper in 2008 and the next year released the software establishing the Bitcoin system.
One other interesting stat to show how big this has become is the processing power dedicated to Bitcoin. According to Bitcoin Watch, the entire Bitcoin network has reached one exaFLOPS. What does that mean exactly? Well, when you compare that statistic to the world’s most powerful supercomputers, its awe inspiring. One exaFLOPS is over eight times faster than the combined speed of the top 500 supercomputers in the world. It’s big.
There is no security on this earth; there is only opportunity. -Douglas MacArthur
But as with anything, the devil gets to be in the details. There has been much publicity about the recent vulnerabilities found within some of the platforms, most notably Bitcoin. It’s been reported that currency exchanges have a 70% chance of being breached, and a recent theft of web-based wallet provider resulted in a $4.6 million dollar loss.
Clearly, emerging crypto-currency needs are unique in that there is no authority in the case of theft. In light of this, the community must gain consumer trust for everyday transactions.
Sometimes by losing a battle you find a new way to win the war. -Donald Trump
So while fraud has already occurred for virtual currencies, it happens every day in banking as well. Credit card service providers get hit routinely and have several companies that offer forensic services through the Payment Card Industry. Thus, it’s not uncommon or in any way unique to anything of value. With Bitcoin, each transaction is publicly logged and acknowledged, so the transaction can be verified against fraud. The coins exist and are verified to be transferred. This eliminates many of the vulnerabilities typical of other transactions. Still, the transactions are anonymous, and authentication to each account is not the responsibility of the system. The services around the system, such as wallets and exchanges, need to be securely coded with products to protect crypto-currency.
Much of the work done in today’s systems is still elementary and involves establishing trust between parties, verifying identity, and ensuring the money flows appropriately. With every new incident however, the community can learn and refine areas for building that trust for each and every transaction. However, since most of the effort has been on building up the viability of the currency, and even with“Crypto” technology or Cryptography, security will still take its lumps along the way. Gaining ground in this endeavor is paramount as pressure mounts.
Security is, I would say, our top priority, because for all the exciting things you will be able to do with computers. If we don’t solve these security problems, then people will hold back. – Bill Gates
So how do you build upon what has been established within the currency foundation? Assuring that there is a path toward managing risk, there needs to be a degree of confidence that the security measures work as intended to protect the currency system and the information it processes. In building up a Virtual Currency Security Program, how we’re attacking the problem is to start with defining a currency security framework that places security program management in the larger context of the goals of the ecosystem. We use this as the basis to systematically identify programmatic weaknesses and establish targets for continuing improvement. We also provide an actionable framework for developing a robust data security process – including prevention, detection and appropriate response to security incidents.
It’s also crucial to determine the acceptable level of security risk at various points in the system and implement the optimal level of management and technical control; too little control may result in financial exposure, and too much may result in unnecessary cost. As with anything quality related, the sooner you get this right, the better, faster and cheaper the process becomes. Much like the currency itself, this can have exponential returns.
First they ignore you, then they laugh at you, then they fight you, then you win. – Mahatma Gandhi
While many people see Bitcoin as an unregulated currency and pay it no attention, others see it as a global exchange where each transaction is transparent, verified, and frictionless. It can fundamentally change the systems we use for transactions, and that opportunity is immense. This is coming. It’s only a matter of time.SecureState is offering its support, experience and credentials as the first security company to offer a virtual currency security package.
Contact us at www.securestate.com to find out more.