Bitcoin provides the benefits of decentralisation and the assurances of transaction security. Consequently, cryptocurrency is gaining traction in the digital space. Although crypto transactions are more accessible and challenging to forge, organisations dealing in cryptocurrency must still take security precautions.
Eliminating the central authority reduces processing fees, and funds transfer becomes faster. Nonetheless, digital cryptocurrency balances face the risk of complete depletion by a computer crash, a hack, or other unexpected events without a central repository.
Organisations that handle cryptocurrency (or “cryptos”) Like Quantum AI trading must ensure transaction security and compliance with the Cryptocurrency Security Standard. Consider the following key points when securing all information systems that store, accept, or transact with cryptocurrencies such as Bitcoin.
A cryptocurrency system necessitates the safe generation of cryptographic keys and seeds. Pay close attention to unguessable numbers and confidentiality when reviewing your organization’s security measures in this area. Confidentiality ensures that newly generated keys or seeds do not fall into the hands of an unintended party. Using unguessable numbers prevents involuntary actors from impersonating the intended key/seed holder.
An organisation must protect its cryptocurrency keys with the same care that it would protect the key to a bank vault. They should be stored using appropriate methods such as encryption, secret sharing, and physical locks. Backup keys/seeds should also be securely stored (on paper, digitally, or in another format) and protected from environmental hazards. A platform offers a safe environment where investors can transact and trade Bitcoin freely.
The people who design and maintain your organisation’s information system are undoubtedly technically skilled, knowledgeable, and experienced. Even the best heart doctor would seek an objective diagnosis from another expert. Inviting an outside expert to identify control flaws and risks can help you avoid cryptocurrency system flaws that staff may overlook or underestimate.
Maintaining the integrity of cryptocurrency wallet/key usage is also critical. Best practices listed here can help avoid risks such as lost or stolen keys or unintentional disclosure of the wallet holder’s identity.
- Creating distinct addresses for each transaction
- Two signatures are required to spend funds from the wallet.
- Only using keys/seeds in trusted environments
- All key/seed holders’ identification, references, and background checking is necessary.
- Assigning duplicate keys to each wallet for recovery
- Keeping keys with signing authority in multiple locations.
The organisation must regulate who enters cryptographic information and can act on it. Key holders must receive extensive training in their roles and procedures. In addition to proper on boarding, you should have policies to overturn privileges when employees leave the company. Adding “least privilege principles” — where users get only the permissions necessary to do their work — to the virtual currency information system could enhance security.
Other Factors to Consider
It is also critical to implement a key compromise policy. A process that dictates what actions users must take if an encryption key or its keeper is compromised can decrease the risks and losses. A data sanitization policy is also required. With data remaining on electronic media even after retraction, you must ensure that your staff is aware of the risks. Avoid data leakage from decommissioned devices such as servers, hard disk drives, and removable storage by giving trained employees access to tools that perform secure data deletion.
Entities in cryptos must also maintain regular documentation of reserve funds for compliance purposes. Audit logs are also handy for understanding how unexpected security incidents occurred and quickly resolving inconsistencies to return the information system to a stable state.
The Bottom Line
Bitcoin still holds its popularity and remains a potential key to the future of digital currencies. All in all, it comes with challenges that we have to confront. However, this digital currency remains very promising and worth a shot.