Can Banks Protect Crypto Better Than Crypto Companies?

Picture of Cryptocurrencies

Banks are the most important institutions in the world today. In the crypto world, though, banks are not exactly trusted. Cryptocurrencies have been created to be decentralized and independent of banks and governments.

In fact, there is a good chance that some of the biggest Bitcoin investors are also some of its most vocal critics. That is because most cryptocurrency users have had negative experiences with banks and governments in the past — and they are trying to change things for themselves by using blockchain technology. But despite this widespread mistrust of traditional financial institutions, there are many reasons why banks could be better equipped than crypto companies to protect your assets from hackers and thieves.

Why Banks Can Protect Crypto Better Than Crypto Companies

Phishing attacks are becoming increasingly sophisticated and difficult to detect. Because of this, exchanges have started to implement 2FA (two factor authentication) as an additional layer of protection for their users. However, this approach does not seem sustainable in the long term because it only protects against phishing attacks and not against other types of attacks such as DDoS attacks, which can be just as damaging as malicious hacking attempts when they happen at scale.

To protect themselves from being hacked and losing customer funds, banks use multiple security layers such as firewalls, anti-virus software and advanced encryption techniques such as two factor authentication and biometrics in order to prevent unauthorized access to client accounts. They also have strict internal policies about who can access customer data. While this may seem like a minor issue at first glance, it could actually become a serious problem as more people enter the space.

Final Thoughts

As cryptocurrency becomes increasingly popular, consumer and business demand for greater access to crypto services is growing. It is imperative then that banks are willing and able to provide these services. Fortunately, there is no doubt that this will happen in the long term. In fact, it has already begun. Banks will enter the space and provide more competition thus driving down costs. This inevitable development can and will help protect consumers from the type of fraud and theft we have seen over the past year.

Read more at:

Cointelegraph: https://cointelegraph.com/innovation-circle/can-banks-protect-crypto-better-than-crypto-companies

Entrepreneur: https://www.entrepreneur.com/article/399503

NY Times: https://www.nytimes.com/2021/11/01/business/banks-crypto-bitcoin.html

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