Bitcoin Forum

The crypto market has experienced rapid growth in recent years. However, behind this tremendous potential lie serious challenges related to security and privacy.

What many people are asking is what are the main challenges faced in protecting the security and privacy of users in the crypto market? How can the crypto industry overcome these challenges?

Well, it depends on what you're planning to do. Bitcoin isn't the best when it comes to privacy; there are other options for this job, such as Decred, Dash, and Monero. Regarding security now, I'm not too certified to voice an opinion, but quite a few incidents have occurred with wallets being compromised, some of which were supposed to be non-custodial but turned out not to be; see the latest incidents with Atomic or Trust wallets. There are certainly ways to preserve your security, by using non-custodial, air-gapped or hardware wallets. While there's never a guarantee, taking the necessary precautions to prevent a possible compromise

Those challenges are not easily solved, as due to the nature of this market we cannot rely on a centralized solution which will solve all of our problems, we need that each person informs themselves about the challenges ahead and learn how to protect their coins on their own, now they could give up the control of their coins and rely on a centralize solution to store their coins, however we know those solutions have huge problems and for the most part they do not resolve a single one of the challenges we have to face anyway.

The crypto industry cannot overcome these challenges, these challenges are part of the industry. The best we can do is to find a way to mitigate them.

For security and privacy, it can be said as below;

• The security of the coin network: In this aspect, the most secured coin is bitcoin and it is very much decentralized.  So, unless you talk about shitcoins which has not good security architecture
• Security of the coin in the custody of the investor: This is when we begin to talk about the type of wallet you use (custodial or non custodial), here we begin to talk the right use of the exchanges. We also talk about how safe your devices where you install your wallets are and more.
• Privacy: It is here we talk about how the projects are about to conceal the data and information of the investor. It is here that privacy coins like Monero comes to play, also here mixers comes in for Bitcoin and more.

So, every problem already has solutions in the cryptocurrency industry.

Here is a compilation of good threads, Security and Privacy Topics on Guides and Protection. (https://bitcointalk.org/index.php?topic=5387164.0)

Also you need to understand, what a $5 Wrench Attack. (https://chainsec.io/wrench-attack/) The world that we move right now is really dangerous, yes, we can make a lot of money out of it, but there security concerns and we should know what is the best practice in this industries. Not just criminals online but there are attacks even in real life know on those people who talk about their crypto investments. So we need to be very careful.

Then you also have to know what is the difference between a custodial and non-custodial wallet, Custodial vs. Non Custodial Wallets - "Not your keys, not your coin" Explained. (https://bitcointalk.org/index.php?topic=5173370.0)

It will attack us for real and many will target crypto assets if we cannot protect the privacy of our portfolio.

See some news that reported that the owners of quite a lot of Bitcoin assets were targeted for robbery and murder.
That means being anonymous is very important and crypto privacy must be very well maintained.

If only online crime may only deal with Malware, Phishing, and some scammer methods that will try to steal the private key or seed phrase wallet that we use.

There are so many solutions to security and privacy problems. Centralized exchange has made it impossible to stay anonymous while using their exchange because you're obligated to complete their KYC verification or you won't be granted your withdrawal.

We have mixers that can be used to increase privacy, if you withdrew from a KYC exchange, you can send the coins directly to mixers then mixed the coins before sending it your wallets. Make sure you make use of wallets that you have your private keys as that increase privacy.

KYC is the main challenge when protecting the security and privacy of a user therefore making use of exchanges that don't mandate kyc or completely ignoring centralized exchange and only make use to decentralized exchanges will solve this privacy problem.

In terms of what? hacks? then do used hardware wallets, make a very hard password that is not easy to break. Used 2FA or Google Authenticator.

On the outside world, don't talk to anyone about how your crypto investments is, whether it's big or just enough for you. Don't trust anyone. We all know that "byob" - Be our own Bank so that alone will tell us to be very very careful already.

And for the wallets, protect your private keys and do not divulge it to anyone.

I think, to address this challenge, the crypto industry needs to adopt a comprehensive approach towards security and privacy. One of the steps that can be taken is that the crypto industry must continue to develop and implement new security technologies to protect users' crypto assets. This includes the use of strong encryption, innovative identity authentication technologies, and sophisticated threat monitoring and detection.

When we are talking about the general terms which is cryptocurrency that has brought every other digital currency into same approach, we cannot but different bitcoin in cryptocurrency that it's different from the same consequences other crypto received in terms of security and privacy matters, bitcoin is the only most secured and privacy digital currency anyone can choose to adopt, other cryptocurrencies are centralized and there's lesser security and privacy on anything centralized.


Everyone of us constitute to the change in cryptocurrency, if you engage in scam or promote any related activities in scam, we should learn about bitcoin, know the difference between this and other cryptocurrencies, avoid investment on shitcoins, then take custody of our asset into our possession, avoid third party interference, avoid centralized means of holding our digital coins by being decentralized using a cold storage wallet, if all these were taken into consideration we may not have issue related to scam, security and privacy challenges.

finance has never had privacy. even before crypto fiat was not private. it had KYC.. yep KYC is nothing new. its been around for decades before crypto

the issue with crypto is that in 2009-2013 it was defined as private property (like pokemon cards or ty beanie babies) where they were not legally defined as a recognised currency
however in 2013 they became legally recognised as a currency which meant that currency laws and regulations had to step in. and start messing around with licencing payment processors

trying to do DEFI, DEX and subnetwork routing wont solve this. things like localbitcoins tried it and eventually the small independent traders were getting caught by banks being told they cant just use their personal bank accounts if they were acting as a business trader of a currency. causing those traders to then need to request KYC (there were other reasons too)
DEFI DEX and subnetwork routers are a new thing of the same problem which they will be hit sooner or later with the same issue localbitcoiners faced.(it takes time for regulators to catch up on how to track and hit unlicenced payment processors)


however the big picture solution to privacy is this
have a system that doesnt define itself as a currency system but as a private property swap system, thus currency laws wont apply

I am talking about the Bitcoin here so it's known that it can't be tampered or reversed after the confirmation which is the positive side of using cryptocurrency but the idea of being our own bank might be the challenge cause we are completely responsible for our holdings so if our system becomes vulnerable then attackers can assess the keys or wallets itself and drain your wallet.

This is not only related to cryptocurrency but the whole privacy of all internet users so its important to create awareness about keeping our data safe while connected to online.

Dump centralized crypto exchanges as much as you can. Setup a cold wallet and "be your own bank".
This is the only way the crypto world could overcome privacy and security problems. Not the so called "crypto industry".
I assume that by the term "crypto industry" you mean all the centralized crypto companies, which are offering crypto fintech services.
I couldn't care less about some centralized crypto companies having issues with the authorities, getting sued or being forced to shut down.
Their problems are not my problems, because I don't have any crypto funds stored in their hot wallets.

I feel that is the most we can do for security and also privacy, you cannot be scared about securing your own funds and then trust others to keep it for. The kind of attention you will pay for any of your things is certainly not measured same to how a person or an entity will have over yours. And if you are kind of too scared then there are options like trusting your kin or families to keep some for you rather than storing these keys on platforms that either the developer would one day compromise or some of its work will. But with multiple back or using kin and family then you know where or who must have been involved in compromising your funds. I still think the best of bitcoin and crypto currency at large is the been our own bank.


The problem is all these authentication are actually available but the major problem is as technology advances with developers trying to create extra layers of security so will scammers, there is no way beating this. The thing should be people should seek out adequate knowledge in everything they want to get into and shouldn’t be in a rush to do things like installing or updating apps, verify them diligently. Even if people use encryption they would still get compromised if they aren’t careful. Take off your keys off online services no matter how hard it is for you to be your own bank. People should also be less greedy because most of the major scams are through phishing which are followed through by people that want to earn through faucets or airdrops

Security and Privacy are very different things that needs to be taken care of. Security needed by everyone, it is something we need to protect our funds and I understand that is going to be to that easy, but we are handling it some way or another. I wouldn't expect it to do too well, obviously it is not going to be easy but that doesn't mean that we are going to end up with some trouble, it will take a while.

I think it is quite important to remember that if you are giving your crypto to someone, there is a good chance you will never see it and that is the scary part about it, always keep remembering that. I know that it takes time to adjust in this market but that is what we need to do and that is what we will need for a long time.

There's no privacy worth protecting when you use centralized platforms - almost all of them require you to pass KYC. If you care about privacy - then you should use decentralized exchange that has good reputation. The advent of decentralized exchanges is how some developers have handling this problem.

Apart from that - the mixer is made to make it easy for you to get some privacy for your coins. But recently the government has closed some of its services.

In terms of security, it's always best to note that the known quote that we've got which is "if you don't hold the keys, you don't own the coins."
And about privacy, we should start it from ourselves like being lowkey and not too noisy of what you've been doing or investing or holding unless someone asks you what are those. Physical concern of privacy like avoiding wrench attacks which has been on the news and even took lives of those holders/investors. The lesson of starting to your own by protecting your privacy and not being too vocal about it is what should everyone does. The next one is about the wallets that we use, if it's an unknown wallet and you're still optimistic about it you have to make sure that you've done enough research before using it as your personal wallet or cold storage. Too many stories have been said that they've used an unknown wallet and then eventually someone has hacked them or their funds were no longer there and that's because there are other people that has access to that wallet that they've downloaded randomly. Use known desktop wallets for protection and also hardware wallets.

First of all, you had been here for quite a long time, you can put more effort when you created a thread.

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I agree with you in most of your statement, the only problem i see its..... the "new" crypto guys who doesnt want to understand basic question and think all its beautifull and easy, and also think KYC was only invented to destroy crypto.

When you ask them the question , ok now go an buy a house in the real life with the money made in crypto without having a job and without making a laundry enginering of money.

Yes, they cant provide an answer.

If someone is too insecure regarding their privacy and security after joining the cryptocurrency market, they should simply use exchanges that don't require KYC or are decentralized, use wallets that give them access to their private keys, and use or hold cryptocurrencies that are 100% decentralized like Bitcoin, otherwise, it will become a bit difficult for them to protect their privacy and security.

It is totally up to you how much you can protect yourself whether it's about the security of your coins or the projection of your personal information and documents. Use the services and platforms that provide best security and protection to avoid any issues.

Crypto industry definitely CAN tackle these issues, just not yet as there are no tools ready for that. But there's going to be.

Privacy trough ZK smart contracts alone and ZK based ID will guarantee that information will be private, and can in fact be a holy grail for GDPR / privacy laws. These are currently being made, they are just not ready for big adoption yet.

I am thinking that by security, OP means investor's security as user is always responsible for themselves. And it's really hard to do anything for the user safety on this. Users will be always the weakest link and vulnerable for social engineering, thefts or hacks. Some coins could technically deal this in token issuancer level and make transactions reversable. But i am not sure what that would look like or what would it do to the ideology of decentralization and permissionless transactions.

These immutable transactions most likely won't fly with regulators when we are talking about altcoins that had an ico, ido or any kind of sale. It's likely that demanding that user is responsible of his tokens (self custodity) will be against consumer protection laws but it isn't yet being dealt with.

Regulators can't really do anything about fairly distributed POW coins, or coins that have achived a certain level of decentralization, except maybe they can ban them from CEXes, but teams of funded coins could technically be sued later on about this. I am actually baffled why they haven't yet used this type of attack yet. Maybe it's coming later.

The privacy is only leaked when data breach happens in exchanges. These exchanges ask for our identity verification and ask for our details, they further stores it and when these data breaches happens, our identity gets leaked and privacy is hampered. Regarding the security, if we store the coins in online exchanges or wallets, then definitely our coins will get hacked, so yes store the coins in offline wallet only. Moreover regarding the privacy, try to avoid exchanges and do P2P deals as much as you can.

It is likely if not a certainty that the data you share with exchanges is not only shared to several different governments, it is likely that such information is also shared with other private companies which are interested in profiling you so their advertising can be even more personalized, then it is important that if you want to use centralized exchanges that you use the smallest number of them possible as a way to reduce how many times your data is shared.

I think as long as your money is safe, the information is not a big deal. Like for example I do not know where one of them found me, but a local exchange in my nation found who I was and I had money in crypto, now I didn't share this with them, which means they found it somewhere themselves, that's not normal. However, all they did was call me up and asked me to use them instead, offered me some marketing stuff, like bonus or promotions and such, which basically ended up with nothing.

This is why I believe that the best thing to do would be making sure that we are dealing with this a lot more carefully. I understand that it's not going to be easy, but we could definitely make it work as much as we can, just need some time with it.

The most important thing in crypto is the issue of security, our main goal is to keep crypto assets besides increasing in value of course because we think that security, many projects make security issues the main goal, and in my opinion as long as security is guaranteed then we should believe in cryptocurrencies.

Learning the basics will make your crypto assest safe and private. Stop posting your wallet address online and avoid downloading on unsecured website that will make you exposed for malware.

Most of the incident on crypto is due to the negligence and gullibility of newbie users on basic protection and identifying what scam or not. Crypto is very easy to secured if you are a private person. I'm not a savy techy person but I never experienced a hack incident on my crypto assets.

There are many cases of hack wallets of course because users are not careful and do not care about security, if we use exchanges then the best thing is to activate all security features, the more security features we activate, the better the security, and if we are used to trading on DEX then the most safe is to separate trading assets from assets that we will keep.

We don't know what if the exchange secretly sells our data like what other websites are doing. Someone exposes their modus before. Maybe it was one of their team who lately build a hate to their company. This is the reason why many people are not doing a KYC when it's being asked but they leave the platform immediately and look for other alternative who does not mandate a KYC.

In regards to security, maybe a well-known exchange has a robust security and in case a hack happens some of them have insurance and we can be refunded. Despite of this, I still prefer to hold my coins on my own because I believe on the saying that "not your keys not your coins"

There are lots of privacy and security issues with crypto.

Apps like Metamask tracking your IP address with their forced RCP url
Most coins have no privacy at all, totally transparent. Not good if you reuse addresses
Exchanges which get hacked or peoples KYC details are stolen.
People getting sim swapped and everything

Before mass adoption these issues need to be taken care of first.

Well, referring to what you said, the safety factor is indeed seen as a factor that plays a role in the world of money markets, but I see that until now there are still risks associated with investing in cryptocurrencies. Learn from experience and as a reminder of past events where a series of crypto exchanges and digital wallets have experienced a series of attacks and lost user funds.

This still illustrates that, security in the cryptocurrency world is still not fully guaranteed and there is generally the potential for loss of access. For example, someone loses a private key for reasons that may sound very classic, for example, I forgot to write it down, I saved it wrong, I chose the wrong storage wallet. or so on. What's the ending story. users are confused and panicked when they cannot access their digital wallet, let alone that it is stored automatically online, moreover it contains many main valuable assets.

With KYC verifications, privacy has decreased but security has increased a notch. It actually depends on what aspect of security or privacy you want. According to some, KYCs are things that should not be in the crypto market, according to others, it is the opposite. Even in terms of security and privacy, we cannot say exactly what it should be. Some points need attention, but not everyone agrees 100%. There should also be some features that distinguish crypto from banks. Therefore, rather than answering this question in general, security and privacy questions should be answered one by one.

The main challenge lies in the identity of the user using the crypto market because almost all cryptos require KYC with a different level in my country for each exchange.
This fear is very basic because online crime is very vulnerable to occur even though crypto activities are not visible in real terms like other activities that we do in our daily lives.

The most we can only do is not to keep assets on the exchange to protect against various crimes that can occur.

Main challenges posed to Bitcoin/crypto holders during the upcoming bull cycle:
- Not your keys, not your coins: While FTX taught a lesson, it still won't be enough to keep people from keeping their coins within centralized and pseudo-decentralized exchanges
- Scams, phishing: People still seem to be sending their coins to obvious scams and phishing websites.
- Insecure networks and systems: Only continuing to arise from the latter two problems is the innovation in hacking outpacing innovation in security. Wallets stored on active windows systems, insecurely managed wallets and sensitive information transmitted via insecure networks are causing theft.

I and others have been advocating to have a Cybersecurity & Privacy (https://bitcointalk.org/index.php?topic=5434404.msg61581530#msg61581530) board added for some months now. I believe that the topic should definitely be discussed in a central place because it is definite that there is both knowledge and issues to discuss to be able to combat obvious problems like the above.I implore anyone who agrees to go to that thread, vote on the poll and express their opinion.

I see that people's awareness has started and is growing. In this time, More people also understand the risks of investing in this Crypto world and they taking proactive measures to secure their assets. But yes, the problem still exists. Hackers also continue to develop new tricks that can sometimes bypass security that has been built. Even though cyber security experts and organizations have tried to come up with a robust solution, challenges continue to arise.

It's true, Cyber threats are very serious and, I totally agree with your opinion. Cyber security cannot be the responsibility of only one person or one party. This is a shared responsibility that involves and requires collaboration and partnerships between sectors. With strong cooperation like this I think, we can be more effective in dealing with cybersecurity challenges.

There are some major criteria for safety in the crypto market and ecosystem and you must make sure that you are applying them. Even if you take enough security measures, it means that your accumulation of small an error is steam. If you have decided to enter the crypto market my first advice is to be very careful. We confirm the security criteria without reading and we initially make our safety unprotected. If we want to choose the exchanges that are traded in the crypto market, we need to give a number of information to the other party, which helps to create an insecure environment. Although we do not want to use central stock exchanges, we are forced to. The fact that the volume formed in the CEXs is not satisfactory and the lack of enough environment for trading pushes us to the central stocks. That's why we're not strict about privacy. KYC is a must in the crypto market. We need to focus on different things instead of KYC.

I think that the crypto industry has not done enough work in security. So we can make our own assets safe by taking simple safety measures ourselves. Be sure to actively use the authentication of two factor identity and adopt the method of fishing. This is a small step that makes a big difference. The people here already know other simple steps. Finally i can already say that the crypto industry does not take into account the privacy and will collect more data in the future. KYC and AML will become widespread rapidly.

Yes. Indeed, the crypto market has experienced rapid growth, but serious challenges regarding security and user privacy have also emerged. Key challenges include digital security, platform security, fraud, phishing and regulation. To overcome this challenge, the crypto industry can implement measures such as the use of multisignature security, data encryption, cooperation with security service providers, user education, and cooperation with governments for clear regulations. Protecting user security and privacy in the crypto market is a constant endeavor, and with these measures, the crypto industry can continuously improve the security and privacy of their users.

You are right, Security and privacy have indeed been critical major artists in the crypto market. As I said before, nothing is safe on a system, whatever it is, although sometimes they always say we already have superior features that no one else has in terms of providing privacy features and this crypto market has always been the favorite place for cypro pirates and here is one of them Source: https://en.cryptonomist.ch/2023/07/03/crypto-hack-poly-network-3/ whether it's an issue or not, in this case I'm just reading it.

Not that really a shocking thing on which it would really be that normal that KYC would really becomes more even rampant into these kind of platforms or companies which government cant really just make it slip away.

Exchangers does really involved huge amount of inbound and outbound transactions on which it would really be just that normal that they would really be trying out to regulate these things as much possible which it isnt really that shocking anymore. Its true that most users would really be minding that much about security and privacy on which we are really that been giving importance on but there are really that we do much prefer on things but ending up on having that being filtered out or does give out no choice but to touch up these places. Good thing that we do have other options on which we could really be able to cover out tracks
and would really be still able to execute out anonymous transactions which it could really be done using up by those mixers or touching up DEX.

The only sad thing is that the governments are already after these crypto mixers or even on the decentralized exchanges because they know that many will avoid the KYC or the regulations that are imposed and those users will easily head on to these platforms.

There are lots of mixers and some decentralized exchanges that have been shutdown in the past by the government and its organizations. Let's only pray that there must be something that will left for us but it's always better if we can now familiarize ourselves with the KYC just in case they already shutdown our favorite decentralized platforms. If we still don't want to, then we are free to quit dealing with cryptos.

I think it's a mandatory menu. Yes. related to security and privacy are important aspects that need to be addressed in the world of Cryptocurrency, it is  the target of hackers because of the nature and potential that has value if it is paid for. These attacks can result in significant financial loss for individuals and organizations, undermining trust in the crypto ecosystem. If you want to see you can go to this thread https://bitcointalk.org/index.php?topic=5267124.msg61709519#msg61709519 and it's being discussed in that thread.

How will the users have any privacy if the cryptocurrencies and projects start cooperating with governments and authorities and have clear regulations? When there are regulations, there can be no privacy at all for users since governments and authorities will have access to all their personal data and documents and their financial activities as well, if we talk about privacy from other users, that can be done by using different privacy metrics.

In my personal opinion, the security of a person involved in cryptocurrencies is basically in their own hands, if they know when and where they need to keep their assets and how secure different platforms and wallets are, they can easily safeguard their assets without any issues if they are using centralized platforms, they should use all the necessary security measures to have complete protection.

Not realizing how to protect your coins as a measure before you get in is a common mistake newbies make. They get into crypto to make money, and they try to learn more about trading and such, which is understandable because the only reason why they get in is to get richer, and you can't just protect your money to get rich, you need to make more of it that's what getting richer means.

But they keep forgetting about how to protect their coins and eventually they end up getting scammed or hacked, which results with them losing all their money instead of getting richer. That's a terrible thing but that's just the reality we live in, there is no way else and we need to make sure that its not going to be anything different than that.

Security and privacy is not something so hard to achieve in cryptocurrency,but many were not conscious of how they can have this at the highest order for their own benefits, what you don't know will certainly be a threat to you later in life because the strongest of battle to fight is when dealing with an unknown enemy, but ones you realized the ways to tackle with the security and privacy defence of your crypto experience, you will never be a victim to any form of hack that is being perpetrated by scammers at all means, you will understand how to be secured, the wallet type to use and other measures to take to avoid the loss of assets.