News

29th May 2019
Why crypto currency is less of a cyber security risk than you think

Bitcoin or Bust? In Defence of Crypto Currency

The rise of bitcoin has certainly put the cat amongst the pigeons in the world of finance (and cyber security). Once mocked as a flash in the pan, crypto currency is now a major player in the money markets, with “blockchain” the new word on everyone’s lips.

Unsurprisingly, certain members of the old guard are none too pleased about the success of this uppity new trendsetter. Take Dave Ramsden, deputy governor for markets and banking at the Bank of England. In a recent interview with CNBC, Ramsden was dismissive of crypto currency as a whole, pointing to a study by the Financial Policy Committee that argued “crypto assets are too volatile to be a store of value.”

Bitcoin fluctuations with innovations

It is true that bitcoin has seen enormous fluctuations in its market value, soaring 1,500% in 2017 before crashing back to earth a few months later. But this is to be expected of any new, innovative technology that seeks to shake up a decades-old system. The Switch2IT team suspects the likes of Ramsden – who has trodden a well-worn path from Oxford through to Whitehall before earning a shiny CBE – may not be best placed to judge the real potential of this revolutionary new currency.

Stability in context

In terms of volatility, crypto currency in fact seems relatively stable when compared to many other sectors. Consider the unregulated peer-to-peer lending market, promising huge returns but with no guarantees of your money being covered by the Financial Services Compensation Scheme (FSCS). How about the failure of the Financial Conduct Authority (FCA) to give proper oversight of Carillion and similar companies? Or business bank account information going unregulated under GDPR? We could go on…

Blockchain benefits for cyber security

One has to ask: how is crypto currency any less “volatile” than these other areas? Indeed, how could blockchain regulate all of these? There are plenty of murky methods out there which seem to avoid the kind of scrutiny that bitcoin has received. When it comes to cyber security, bitcoin has certainly had its rocky moments, but let us face it – which giant company has not? From Uber paying off hackers to the tune of $100,000 to TSB’s very public IT meltdown, the idea that only crypto currencies should make users nervous is for the birds.

Crypto currencies for the win

Crypto currencies should be celebrated as a truly global form of exchange which, like it or not, are here to stay. Not only has bitcoin and blockchain created thousands of new jobs but it has electrified both the tech and finance worlds in a way that we have not seen for a long time. Bank of England grandees may prefer technology that sticks to the well-trodden path but is it any wonder that people are turning to new ways of handling money?

The hard truth is that, just maybe, the average person is beginning to trust crypto currencies more than established currencies. With consumers often let down by regulators and losing trust in individual banks and the UK banking sector as a whole, we expect the landscape to continue shifting in the direction of crpto currency. 

Cyber security for your business

It’s a fast-changing world but, with the proper cyber security in place, the business opportunities are as great as ever. To learn more about using blockchain to improve your business or find out more about our IT managed service contracts and what technical support services they can incorporate, get in touch with Switch2IT today.

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