With Ukraine falling victim to what they say was the largest cyber attack in the country’s history, people wonder what effect that attack will have on cryptocurrencies.
With things playing out like an online casino where we never know what will happen next, people are currently panicking with digital assets like cryptocurrencies. So what do we know about the attack, and will it ultimately affect cryptocurrencies.
Two Banks and Ukraine’s Defense Ministry Were Targeted in Cyber Attacks
Ukraine announced on Wednesday that the cyberattacks that targeted the country hit two of their banks along with an attack on their Defense Ministry. The Ukrainian deputy prime minister accused Russia of making these attacks, a claim that Russia and the Kremlin both deny. While the attacks did not affect cryptocurrencies directly, the indirect effect of the attack was a panic selling of crypto’s on the market Thursday, causing numerous cryptos to fall in value.
Banking cyber attacks don’t target people’s cryptocurrency. However, some people may not be aware of that and sell off their investment into cryptos in fear that their cryptocurrency will be taken away by attacks like this.
The fact of the matter is that blockchain technology is the key to protecting digital assets like cryptocurrencies, something that more people should note if they have cryptocurrency investments.
Blockchain Technology Helps Protect People’s Cryptocurrency
While banks having a cyber-attack can cause problems for both banks and their customers, cryptocurrencies run off a blockchain ledger. These ledgers on the blockchain help secure cryptocurrency without needing a third party. People can even have their cryptocurrency stored on either a hot or cold wallet, which is very important for people who want to store their cryptocurrency versus those who need to spend their crypto daily.
Cold wallets are best for crypto users that want to store their crypto offline, helping add a layer of security to their crypto holdings. These cold wallets store the ledger for your crypto wallet onto a USB drive or CD that can be stored and kept offline for use at a later time. No one can access the crypto on that USB drive or CD until it is used, and the code for the wallet is input to access the crypto on the cold wallet.
Hot wallets are for people who need access to their crypto assets daily. People can access these wallets via web-based sites and mobile phone apps, allowing them to use their crypto for their purchasing needs. Hot wallets don’t offer the protection that cold wallets do, as third-party crypto wallet apps can fall victim to cyber-attacks.
People with cold wallets will have the best digital asset protection, as the ledger is stored offline and can’t be accessed by hackers or scammers. Cold wallets also show what amount of cryptocurrency for begineers you have in your wallet, so if there is ever a cyberattack on the blockchain, your crypto holdings will still be secured and accessible when the blockchain is back online.
Banks don’t offer that same kind of protection if they fall victim to a massive cyberattack that could wipe out billions of dollars from their ledgers.
Crypto and the Stock Market: Panic on Wall Street Has Bled Into the Crypto Market
Most of the panic selling has come from those that are closely tied to the stock market. When bad news comes out that hurts the stock market, these people sell off crypto just like other investors do on bad news on Wall Street. Those moves from people that think the stock market and crypto are the same have caused significant losses in the crypto market with their panic selling.
If investors would take a step back and not let every little news story influence them into panic selling, crypto can stabilize the market. That stability would benefit investors and holders of cryptocurrencies in the long run.
When cryptocurrencies first came out, they weren’t affected by stock market moves or daily news as much as they are currently. Until these new holders and investors in cryptocurrencies learn that the market and news shouldn’t affect crypto, crypto’s might continue to have a rocky ride throughout the rest of 2022.