USE OF CRYPTOCURRENCIES FOR SAFE FINANCIAL TRANSACTIONS

AUTHOR NAME: NASSAR E MOHAMED

I-MBA
DEPARTMENT OF MBA
ANNAI COLLEGE OF ARTS & SCIENCE
KOVILACHERI, KUMBAKONAM-612 503
MOBILE NO: 88381161105
E-MAIL ID: nassarmohamed690gmail.com

ABSTRACT:
Over the last few years, technology has brought about a paradigm shift in the way we work,
communicate, shop, and pay for our purchases. With the Government of India's Digital India’
initiative, digital transactions or payments have become more prominent than ever. For a long time
now, people have been well-acquainted with popular and trustworthy payment methods like bank
transfers, credit & debit cards, or even Apple Pay. The latest arrival on the scene is ‘Crypto
currency’, a promising and one-of-a-kind addition to the entire digital transaction experience.
Crypto currency is indeed a revolution to the digital transaction sector and poised to join the ranks
of conventional payment methods. It is accurate to state that the future belongs to crypto currency
and it is undoubtedly here to stay. But like every new technology, it needs to be underpinned by
regulatory clarity and robust systems in place for ensuring safety and security. It can be a reliable
form of investment only if we are aware of the best methods to prevent our crypto currencies from
frauds and risks. While Bitcoin and Ether have earned humongous popularity, other notable crypto
currencies on the rise are Litecoin, Polkadot, Cardano, and many more. Today, many businesses
have started opting for crypto currencies as a potential payment method. The recent upsurge in the
value of bitcoin has demonstrated crypto currency to be a promising and viable investment option.
This is because crypto currencies offer global access, individual ownership, quality speed,
enhanced adaptability, security & autonomy, affordable cost of a transaction, protection from
inflation & fraud.
PREFACE OF CRYPTOCURRENCIES

A crypto currency is a digital or virtual currency that is secured by cryptography, which makes it
nearly impossible to counterfeit or double-spend. Many crypto currencies are decentralized
networks based on block chain technology a distributed ledger enforced by a disparate network
of computers. A defining feature of crypto currencies is that they are generally not issued by any
central authority, rendering them theoretically immune to government interference or
manipulation.
INITIATIVE OF CRYPTOCURRENCIES

In 2010, Laszlo Hanyecz spent 10,000 Bitcoins at a local pizza restaurant called Papa John's to
buy himself two pizzas. Back then his Bitcoins were worth only $40. But, since the crypto currency
wasn't yet a thing in the commercial world, Hanyecz reached out to the Bitcoin talk community
and openly traded his Bitcoins to anyone who would buy him these pizzas. Considering Bitcoin's
value today, which is over $46k currently, these two pizzas can be regarded as the costliest pizzas
of all time.

IS CRYPTO IS SAFE?
While it is important to remember that no investments are genuinely safe, cryptocurrencies in that
regard as well have shown a certain amount of risks. But they have also proven to be a lucrative
investment for many people today. Investments in cryptocurrencies are not as complex as stock
investments, where numerous stocks are available to confuse us every day. The bottom line is that
cryptocurrencies can be safe, but if not taken appropriate safety measures, they can be hacked as
well. There are possible risks and uncertainties with investments and we can’t deem any virtual
currency investment to be unsafe for that.

Buying and selling cryptocurrency does not always have to be risky if the trader thoroughly
understands the market and treats his coins with care. At present, there are numerous
cryptocurrency options available to us but not all options are safe. Taking a certain amount of
precaution is mandatory before investing your hard-earned money into cryptocurrency. It is
exceedingly essential to conduct strong background research on the creator of the coin, whether
they are at all affiliated with well-known brands, whether their screening processes are rigorous or
traded on safe exchanges.

BLOCKCHAINS

Central to the appeal and functionality of Bitcoin and other cryptocurrencies is blockchain
technology. As its name indicates, blockchain is essentially a set of connected blocks or an online
ledger. Each block contains a set of transactions that have been independently verified by each
member of the network. Every new block generated must be verified by each node before being
confirmed, making it almost impossible to forge transaction histories.
TOP MOST TRANSACTIONS

April 10 2020 one bitcoin wallet moved at the time this bitcoin was worth about $1.1 billion
On June 27, 2020, 101,857 BTC was moved from one unidentified wallet to another. This was
worth $933 million at the time of the transfer
On September 6, 2019. It involved the transfer of 94,504 bitcoins, which at a price of $10,654 per
bitcoin, just passed $1 billion.
Crypto exchanges don’t only store their bitcoins themselves. They also transfer them to dedicated
storage companies, which is what happened on October 14, 2019, when Bitstamp transferred
107,848 bitcoin to custody provider Xapo. This was equal to $894 million at the time, and came
as part of a single transaction that transferred 112,027 BTC to a number of addresses.
On February 16, 2020, a wallet sent 48,952 bitcoins, worth $490.5 million at the time.
TOP MOST THEFTS

Poly Network
In one of the largest cryptocurrency thefts to date, a hacker stole over 600 million USD worth of
digital tokens in August 2021. Poly Network, a DeFi (decentralized finance) platform, had a
vulnerability in its network exploited by a hacker that the media calls “Mr. White Hat.”
Coincheck
Japanese crypto exchange Coincheck was hacked to the tune of 500 million NEM (or about 532
million USD) in January 2018. While Coincheck itself had been in operation since 2014, the
currency in question, NEM, and its cold wallet hadn’t been set up properly.
MT Gox
In February 2014. Over a period of a few years, hackers stole 100,000 bitcoins from the exchange
and 750,000 bitcoins from the exchange’s customers. At the time, these bitcoins were worth $470
million–but today, they’d be worth around ten times as much ($4.7 billion).
Bitfinex
The Bitfinex hack was first announced in August 2016 and involved a total of about 120,000
Bitcoin, representing a fiat equivalent of 72 million USD at the time. Unlike with Mt. Gox, the
coins were stolen in a single attack out of the company’s wallets
NiceHash
NiceHash was defrauded of 4,700 Bitcoin (or about 64 million USD) in December 2017. NiceHash
was a Slovenian cryptocurrency mining marketplace,
SOLUTION FOR SAFE TRANSACTIONS

There can be serious repercussions if one does not apply the best practices for coin management
to prevent hackers. With the growing popularity and wide adoption of cryptocurrencies, they have
come under the radar of cyber-criminals. Many notable instances have occurred over the past few
years where cryptocurrency owners have lost their coins. A very simple solution to prevent losses
due to unauthorized access is to store cryptocurrency in an offline device such as a ‘cold storage’
device. Cold storage is a proven way to hold cryptocurrency tokens offline, thereby protecting
them from theft. The most basic method of cold storage is a paper wallet or an external hard drive
for storing the address and the key required to access the particular currency. What is equally
important is to access the cryptocurrency and other relevant information only during the time of
the trading operation and for them to be disconnected after use. This can make it convenient to use
and store cryptocurrencies with minimal risks, ensuring safety and reliability. Proper wallet
management: The majority of your funds should sit in secure multi-sig cold storage wallets. Hot
wallets, which are responsible for automating withdrawals, should have minimal funds because
they are the most susceptible to hacks. Such hacks can be prevented by tightening the security
processes in decentralized finance (DeFi) like Two-step authentications, Proper wallet
management, Use separate wallet addresses, check your wallet approvals Regularly, Keep off
phishing links
CRYPTOCURRENCIES IN INDIA
In New Delhi earlier this week, the Central government announced that it will soon introduce a
bill in the upcoming winter session of the Parliament to ban all private cryptocurrencies, a move
that shook crypto investors in the country. With the decision to ban a few digital coins, the
government has also revealed plans to introduce an official digital currency. The Reserve Bank of
India (RBI) is expected to issue the digital coin that will be regulated by the central bank. The
Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, will aim to regulate the
cryptocurrencies in the country. The law will also become the basis for the introduction of RBI
issued digital currency in India.
CONLUSION:
Each crypto account is locked down by unbreakable cryptography and a private key — a string of
letters and numbers — that serves as an identification code for each crypto account holder. But
hackers have shown that blockchains are not immutable Many countries have deemed crypto
hacking illegal. The most common types of crypto hacking are phishing and social engineering
attacks. However, when it comes to 51% attacks, there are not many laws that prevent miners from
taking control of more than 50 per cent of a network’s computing power. Though rare, more
devastating attacks happen where smart contracts get hacked or exploited, giving the hacker access
to large parts of a crypto company's accounts and systems,