What the Rise of Cryptocurrency Means for Fraud Prevention?

Cryptocurrency is a leading headline generator in 2018. Many high-profile enterprises are fully embracing Bitcoin and other forms of cryptocurrency. Major companies like Expedia, Overstock.com, Newegg.com and Microsoft have already been accepting Bitcoin for payments for quite some time. What does all of this mean for the average enterprise? The slow rise of Bitcoin and other forms of cryptocurrency has allowed enterprises to prepare for both the benefits and the increased risks that go along with embracing the use of cryptocurrency. Cryptocurrency is a form of payment that is anonymous and secure. However, this does not mean that it is a risk-free form of payment.

Why the Rising Popularity of Cryptocurrency Is Posing New Fraud Risks?

Cryptocurrency has not been around long and that alone is enough to create serious fraud risks. It is difficult to understand and getting a grasp on what it does can be challenging. Largely, cryptocurrency comes with all of the same risks that traditional e-payment systems have. This means that phishing scams, malware and similar threats can still present risk. In addition, enterprises that deal with cryptocurrency must also consider issues posed by compromised web wallets, the loss or theft of a web wallet and user errors that cause money to be transferred to the wrong addresses.

How Can an Enterprise Stay Guarded Against Fraud in the Crypto World?

Traditional rules of digital security may need to be updated once an enterprise begins using cryptocurrency. Fraud mitigation needs to be tailored to address the new vulnerabilities that are created by crypto technology. The emergence of cryptocurrency necessitates an enhancement to fraud prevention systems. This includes ensuring that a big data platform is being utilized to appropriately adjust for the unique risks posed by this new form of payment. Before accepting cryptocurrency, enterprises should actively create baselines for activity and establish monitoring for potential threats specific to cryptocurrency. Big data is one of the few tools that is fast and sophisticated enough to be able to detect and respond when a threat or instance of user error appears to be occurring. This is especially true when it comes to encrypted currency.

What Is the Future of Cryptocurrency?

To many, cryptocurrency is the next wave of payment technology. Cryptocurrency is quite different from other forms of payment that enterprises are used to dealing with. It is a digital form of currency that uses sophisticated encryption techniques to regulate the generation of each unit of currency. It has evolved to utilize highly sophisticated aspects of mathematics and computer science to grow. A currency like Bitcoin relies on miners who work to convert legible information into codes that are nearly impossible to crack. Money transfers and purchases made using Bitcoin are virtually untraceable.

Cryptocurrency has built-in mechanisms to verify that funds have been transferred. Unlike common forms of payment, cryptocurrency is not associated with a central bank. Cryptocurrency uses alternate confirmation to show that a legitimate transaction has taken place. The confirmation is what makes a cryptocurrency a legitimate option. It is also what makes it extremely risky in some cases. A confirmation cannot be reversed.

While the emergence of encrypted currencies is exciting, new technology presents new risks. Enterprises will need to stay up-to-date with advances in cryptocurrency to make sure that they are prepared to mitigate risks prior to accepting new forms of payment.

@Technuter.com News Service

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