Cryptocurrency safety evolution: from hot to cold
In just a few years, cryptocurrency experienced huge growth and popularity. However, as this rapid increase, a new set of security problems appears that threaten the foundation of this class of digital assets. In this article, we will look closer, as the security of cryptocurrencies has evolved with time, from the first days of Bitcoin to the current state of affairs.
Early days: hot and cold
In 2009, Satoshi Nakamoto published the original Bitcoin Bigies Bethithate, causing a decentralized cryptocurrency that would revolutionize the way of thinking about money. Initially, Bitcoin was sold as “hot” – his security was largely about human interaction with user computers to verify the transaction.
When more people got involved in the Bitcoin community, security concerns began to appear. In 2011, the Silk Road website was hacked, which led to a significant decrease in value and emphasizing the sensitivity of this relatively new technology. This incident was the beginning of a change in the direction of “cold” memory-users were touched to store their cryptocurrency in offline mode, reducing dependence on peer-to-peer transactions.
The granting of cold storage gains adhesion
Over time, the cold magazine became more widespread, and many main cryptocurrencies took them as the best practice of safety and stability. The introduction of hardware wallets, such as Ledger, Trezor and Keepkey at the beginning of 2010, made it easier for users to store their cryptocurrencies in offline mode.
The increase in private transactions also contributed to the increased reception of refrigeration. By encrypting data on the device before sending it, users can protect their funds from external threats. This concept was a Bitcoin Cash (BCH) pioneer, which allowed users to extract and maintain their own currency while maintaining a high level of security.
Intelligent contracts: next evolution
The introduction of intelligent contracts in 2014 meant the beginning of a new cryptocurrency era. These self -control contracts with the terms of the contract written directly in code lines, enabling more efficient and secure transactions.
Although these are not directly related to security, intelligent contracts paved the way to other innovations that improve cryptocurrency safety. For example, the use of tokenization has enabled the creation of more complex assets, such as Stablecouins, while increasing the speed and efficiency of trade.
Cold War: Regulation and security
As the popularity of cryptocurrency increases, regulatory authorities around the world have noticed. The governments reacted with a mixture of enthusiasm and skepticism, causing a “cold war” between supporters of regulation and those who were in favor of unregulated markets.
While some say that more severe regulations will hinder innovations, others say that it is necessary to prevent illegal activities on these platforms. The debate is ongoing, with many experts in favor of a sustainable approach, which satisfies the needs of legitimate users while maintaining public trust.
Current condition: from hot to cold
Currently, cryptocurrency safety is a key problem for both users and programmers. While the main cryptocurrencies, such as Bitcoin and Ethereum, have largely adopted protection in cold stores and intelligent contract solutions, others, such as Litecoin and Monero, are still focusing on more decentralized safety methods.
Regulatory frames are also developed to solve the problems of legal companies and consumers. For example, the Act on European Union digital markets is aimed at creating equal opportunities for cryptocurrency operators by requiring solid security measures from them.
Application
The evolution of cryptocurrency safety has gone through a long way from the first days as “hot” and susceptible to hacking.
