INTELLIGENT BRANDS // Enterprise Security
WHILE THE
TRADING OF A
CRYPTOCURRENCY
IS STILL FULL OF
MASSIVE UPS
AND DOWNS AS
THE MARKET
VOLATILITY
CONTINUES, THE
INSTABILITY AND
RISK OF YOUR
DIGITAL WALLET
IS A CONSISTENT
THREAT.
Lost cause
A recent article shows just how significant the
extent of this can be. An IT worker in the UK
kept 7,500 bitcoins (almost R930 million) on
his laptop. However, after it broke he sold the
computer for spare parts but kept the drive.
Unfortunately for him, he mistakenly put
the drive in a waste bin at a local landfill site
while cleaning his house in 2013. Following
the surge in the currency in recent months, he
now wants to go find it. The health and safety
regulations of trying to dig around four years’
worth of landfill has seen the council reject his
requests for trying to locate the drive.
This and many other examples on the
Internet should spur even the most
sceptical of people into action. Even though
the financial impact is significant (and
potentially devastating), one should take
care of applying the same availability rules
to digital wallets and cryptocurrencies as is
done to all important data.
Don’t bank on an online backup
The most critical of these is the 3–2–1
principle. It states that you should have at
72
INTELLIGENTCIO
POWERED BY
Even before news of the scam broke, the
South African Reserve Bank (SARB) stated
its intention to review its position on private
cryptocurrencies. This entails assessing the
growth of fintech’s and to consider the
regulatory implications of cryptocurrency.
Beyond that, investors should consider
the consequences if exchanges should go
down and they are left unable to trade their
cryptocurrencies. One such recent example
is the Kraken exchange that was taken down
for scheduled maintenance but was only
up and running after a delay of more than
48 hours, with investors unable to trade
during a highly volatile period on the market,
meaning they lost out on significant returns.
Just imagine something like this happens on
a real exchange operating in pounds, dollars,
and a myriad of other currencies.
Maintaining your strategy
Claude Schuck, Regional Manager for Africa
at Veeam
least three copies of your data, store the
copies on two different media and keep one
backup copy offsite and off the Internet.
You might even consider making a backup
to leave in a safe deposit box with your
watch; just make sure you encrypt it first.
For obvious reasons you cannot duplicate
your digital wallet or cryptocurrency, but
you can still ensure you do not keep it at
your physical location and off the Internet.
Going with a reputable service provider for
the safe storage of your cryptocurrency is
the best way of avoiding loss if your drive
gets stolen or compromised. Despite it being
digital, if cryptocurrency is lost, such as in the
case of the hard drive in the landfill site, it is
gone forever. Imagine it as real cash left in a
burning house.
Difficult market
But it is not only data that needs to be kept
safe. South Africans recently joined thousands
of people from around the world in falling
prey to a bitcoin scam that resulted in losses
of more than US$50 million. Promising
unrealistic weekly returns of 14% in exchange
for an investment of close on R12,000, this
turned out to be too good to be true.
Returning to our IT worker, he might
eventually be able to find the drive and
access those coins but the chances of that
happening are close to zero. However, if the
cryptocurrency had been stored in the cloud
then he will always be able to access it; if he
hadn’t lost the wallet seed or access key to
do so too.
Cryptocurrencies, very much like our reliance
on data, are here to stay. It’s not just the
trading aspect that poses a risk, it is about
how best you approach your investment’s
accessibility and backups. Putting the
appropriate steps in place and ensuring the
availability and continuity of access to your
digital wallet will rely on proven strategic
principles that big business adopt with their
critical data.
Much like the IT bubble of the 90s, users
must resist the temptation to blindly adopt
the ‘shiny and new’ if it is at the expense of
traditional operating procedures. It is best to
combine the strengths of both elements to
keep that cryptocurrency safe.
Thankfully you don’t need to be a
cryptography expert to take some of these
basic security steps to protect yourself
against most attacks. And if nothing else,
don’t lose that wallet seed or access key,
or risk taking a ride on not just a financial
rollercoaster, but a security one too. n
www.intelligentcio.com