Cryptocurrencies aim to put currency control in the hands of the people using it as opposed to a centralized banking system. These types of currency work by using specific encrypted codes that stand for money units (bitcoins, for example).
Currency requests and transactions are processed using individual computers rather than the main system. Users who process cryptocurrency with their computers are rewarded with more currency as an incentive. The idea is innovative, but when delving into using cryptocurrency it is important to know the risks in addition to the rewards.
Learn more by reviewing the cryptocurrency pros vs. cons list:
- Pros:
- There is no middleman and the process is as quick and simplistic as an e-mail.
- There is an additional layer of anonymity, unlike credit card transactions, which hold potential for stored cardholder data.
- As of now, the encryption has been impervious to hackers.
- Lower fees than bank transfers and credit cards.
- Cons:
- All currency is localized, so if you lose the computer or drive you have stored your bitcoin or other currency on, it is not retrievable.
- Worth is volatile. There is no standard for maintaining value, so it often fluctuates to a great degree.
- Currency exchange sites are vulnerable to attacks, such as DDoS, which when it occurs, can greatly devalue the currency.
- The inability to be traced and anonymity means cryptocurrency is often used for nefarious purposes.
- Users are not protected by refund rights or chargebacks, like bank accounts or credit cards.
Have questions? We're here to help!
If you have questions about cybersecurity, or if you want to learn more about how to stay safe online, contact the Information Security Office (ISO) at: infosec@miami.edu
