Cryptocurrency has only been around for close to a decade. However, there has been $1.2 billion in various cryptocurrencies that have been stolen around the world. This amount of theft has given people a great deal of concern about investing heavily in it. It is not surprising that there has been so much theft when you consider that it is a digital currency. This means that hackers will be out in force trying to steal it. Another problem for cryptocurrency has been its reputation as the currency of choice for criminals and members of the underworld. The fact that it is completely anonymous allows people to use it to buy things on black market sites without fear that the transaction will be traced back to them.
It is not hard to understand why people would be apprehensive about investing heavily in a digital currency that is hard to protect and easily stolen. Banks are federally insured in the United States. This means that when a bank is robbed, the customers will not lose their money. There is no such guarantee in the world of cryptocurrency. No insurance exists when you invest in Bitcoin or any of the other popular types of cryptocurrencies. When that money is stolen, it is gone for good.
Many people have been demanding that cryptocurrency exchanges get financial backing that will insure the investments of their customers. The FT Exchange is the only one that has done this so far. They have received the financial backing of Alameda Research. Increased security protection is also being demanded from investors. It would seem that the cryptocurrency exchanges that are willing to address the security and financial backing concerns of the public will be the ones that survive. It is possible to make cryptocurrency totally safe from being stolen by hackers. However, that would require the access keys to be stored on external hard drives or on paper.
Banks are hesitating to get involved in the cryptocurrency business because of all the associated risks that go along with it. The amount of money that would be required to create security protocols to adequately protect cryptocurrency would be enormous. Therefore, it seems unlikely that any banks will be jumping on the bandwagon any time soon. The one thing that might finally convince banks to take a chance on cryptocurrency is the value. If the value of Bitcoin keeps going up, banks might want to get involved.
