2018 Q3 LIFE Newletter - Issue 14

C Y B E R S E CU R I T Y

RELIANCE TECHNOLOGY SOLUTIONS Information Security

Cryptocurrencies: Uses and Potential Dangers Cryptocurrencies – heard of them? Let's explore what they are, what their characteristics are compared to common currency (fiat money), and how they can be used (and abused). Three main features of currency (e.g., Since cryptocurrencies are digital information, they move swiftly and cheaply online through borders and blockades, regardless of languages, to wherever and whomever the sender wants, which is particularly useful for remittances.

Because it is decentralized on tens of thousands of systems, there’s no central authority to regulate it or provide stability. This provides the benefit of freedom from outside interference. RISKS AND DANGERS The strengths of cryptocurrencies are also their weaknesses. Although anonymity may protect users in some circumstances, it also makes it impossible to hold people accountable for their actions, and tempts people towards behavior they might otherwise avoid. It can also support marketplaces for unsavory and illegal products that would quickly be shut down if the participants could be identified. Cryptocurrencies are also a preferred means of payment for cyber criminals who write malware to extort or blackmail innocent people. The recent flood in ransomware attacks are examples of cryptocurrencies at work, allowing hackers to get away with asking a ransom for decrypting information that was encrypted by clicking a malicious link or opening a malicious attachment. Lastly, since cryptocurrencies are controlled by whoever possesses the key to the associated account or wallet, if that key is compromised, the cryptocurrency can be stolen by hackers. And without any central authority in control, there’s nobody to ask for help.

USD, EUR, JPY) are that: (1) they provide a safe way to store value at one point in time, for later use; (2) they let us transfer our ownership of that value to someone else in exchange for something we want; and (3) they are a way to compare how much we value completely unrelated same three features; however, they do this in a decentralized manner – without the need of a bank and without any trust towards a third party. Cryptocurrencies are used online and rely on cryptographic algorithms to securely track and prove ownership. They can be exchanged between users in near real-time and at a very low cost compared to fiat money. Hundreds of cryptocurrencies have been created in recent years, some with distinct properties geared towards specific use cases (e.g. anonymous payments, smart contracts, fast transaction times, etc). things relative to one another. Cryptocurrencies provide these

Cryptocurrencies can be stored on anything from computers, cell phones, and thumb drives, to hardware wallets. They can also be split into any denomination. This makes it accessible to the underbanked in the world, who can now be part of the global economy and exchange cryptocurrencies for goods and services where traditional banks would not be able to help them. Blockchain is the technology that makes cryptocurrencies work. It allows tracking and linking of transactions in a way that makes fraud virtually impossible. Cryptography keeps the record of accounts tamper-proof and enforces the rules of owning and trading the cryptocurrency. Bitcoin was the first popular cryptocurrency. Since it was launched in 2009, its value has spiked from pennies to nearly $20,000, but it has come down recently to much more modest levels of around $6,000.

ISSUE 14 | JULY 2018 5