With advancing technology making waves across all industries, it’s no surprise currency is included. After all, cryptocurrency isn’t new, it’s been an intriguing topic for over a decade.
Bitcoin and related digital currencies are both criticized and marveled at. That conflicting attention isn't easy to ignore, especially as humanity's digital footprint expands. As this technology moves forward, cyber security becomes paramount. Crypto assets are still a collection of valuable electronic data, and not immune from cyber crimes.
As some experts in the crypto-currency world have stated, one of the most common threats to data privacy and protection is “the lack of awareness people have about their cybersecurity.” It’s important to consider a trusted VPN for more protection. One that's used across all your digital devices.
For more insight into the future of digital currency and the importance of cyber protection, we spoke with Merel Hendrikse, the Head of KYC/CDD at Bitmymoney – a crypto-currency company aimed at helping people build future wealth in what they consider is "the money of the future.”
How did Bitmymoney originate? What has your journey been like since?
Bitmymoney was founded in 2013 by Robert-Reinder Nederhoed and Mieke de Haas. It was their mission to make Bitcoin easily accessible to the public. Robert-Reinder and Mieke consider Bitcoin to be the money of the future. It will be available to anyone with an internet connection, without interference from a central party or central bank. Bitcoin allows people to be their own bank.
That offers them freedom and independence. That includes when you live in a country with an oppressive regime. In the early days of Bitmymoney, we considered it to be a webshop where people could easily buy Bitcoin, Litecoin, and Ethereum to build up a position or savings account with the money of the future.
Nowadays, crypto-currency companies have to follow laws and legislation. They're considered financial institutions comparable to regular banks.
Can you introduce us to what you do? What are the key features of your app?
We aim our app to be an easy-to-use platform to buy and sell Bitcoin by periodic bank transfers. This is unique for our platform.
We also offer our clients the option to send currencies on-platform (send-to-a-friend) which makes it easy to pay or share cryptocurrencies without the costs of a blockchain transaction. This feature is often used by our customers, for instance, to pay their friends for dinner. Or to deposit some funds into a savings account for their children.
Another feature of the app (and website) is swapping currencies. Also, we introduced a new token: Pax Gold. It’s tokenized gold that represents physical gold, stored in the safes of the London Brinks Bank. When your Bitcoin, Ethereum, or Litecoin have reached the desired price, you can swap them for Pax Gold. It's a safe haven to ensure your profits.
Since digital assets are a relatively new technology, there is still some confusion and myths surrounding them. What misconceptions do you notice most often?
The most common misconception is that Bitcoin holds no value in contrast to fiat money. The value of Bitcoin lies within the technology. Critics often argue that since Bitcoin is not backed by any physical asset or government authority, it cannot have inherent value.
However, the notion of intrinsic value is a complex and debated topic. Especially when it comes to modern currencies, including fiat currencies like the US dollar. In reality, the value of any currency, be it traditional or digital, is ultimately derived from the belief and trust that people place in it as a medium of exchange and a store of value.
Bitcoin, like any other currency or commodity, holds value because it fulfills certain key functions.
Bitcoin is an excellent store of value. Bitcoin has a limited supply of 21 million coins. The scarcity of Bitcoin exceeds the scarcity of gold and cannot be printed at will by governments.
Greater portability: Bitcoin is more portable than gold. A bitcoin gets stored on a digital device or in a digital wallet, and it can be easily transferred anywhere in the world with an internet connection. Gold is much heavier and bulkier, making it more difficult to transport and store.
Decentralization: Bitcoin operates on a decentralized network, meaning no central authority controls it. This decentralization is appealing to many individuals who value financial sovereignty and independence from government-controlled currencies.
Limited Supply: Bitcoin's supply is capped at 21 million coins, making it a deflationary asset. This scarcity, combined with increasing demand, contributes to its perceived value.
Digital Scarcity: Bitcoin's design incorporates mathematical scarcity, achieved through mining and the difficulty adjustment algorithm. This digital scarcity is a unique property that sets it apart from traditional fiat currencies.
Utility: Bitcoin is used as a medium of exchange for goods and services. Its adoption is a means of payment and continues growing.
Store of Value: Many investors view Bitcoin as a store of value similar to gold, seeking to protect their wealth from inflation and economic uncertainties.
How do you think the pandemic influenced the way people perceive the crypto landscape?
What we noticed most of all is people being a bit bored. For some of the people work was temporarily on hold and people held on to their savings.
Also, due to the several lockdowns, people weren’t able to spend a lot of money on leisure activities. We saw an increase in people day trading altcoins or investing in Bitcoin.
On the societal level, we saw an increase in distrust in central governments and central banks. That led people to have more faith in Bitcoin.
What are the biggest mistakes that new crypto owners tend to make?
Greed. We tell people to commit to the DCA strategy when investing in Bitcoin. Dollar Cost Averaging means you build up your investment regularly over a longer period.
Committing to this way of making investments means you overcome the volatility of your crypto assets. Investing a big sum of money at once and hoping for the rates to reach an all-time high hasn’t turned out to be the best strategy. The results: a loss in capital.
We try to convince people only to invest the part of their capital they can easily do without and to choose a goal for their savings. Once the goal is reached, don’t feel afraid to sell your crypto assets. Stay away from the very volatile altcoins and slowly build up your Bitcoin portfolio.
In your opinion, what are the most serious cybersecurity threats prominent nowadays?
Many cybersecurity threats compromise people's privacy, funds, data, and cryptocurrencies.
The most common threat we encounter is the lack of awareness people have about their cybersecurity. This means: not being aware of possible data leaks, and using weak passwords on the most important digital services. Whenever we intercept attempts to hack into our customer's accounts, most of the time it's because of email spoofing.
A person's password was obtained from a previous data leak (Apple, T-Mobile, and other bigger companies were the victim of data leaks recently). The hacker will try to log in using the obtained password and often succeeds because people tend to use the same password for most of the services they use.
Another threat that seems to be a trend is ransomware. We notice an increase in companies that fall victim to so-called cryptolockers. Their databases or servers get locked by hackers, and the company is asked to pay a ransom to get its data back. Often, the ransom payment is made in Bitcoin.
What measures should crypto owners and average individuals take to protect themselves from these new threats?
If you keep your funds in self-custody, aka a hardware wallet (Ledger, Trezor, or Safepal), make sure you write down the keys to your wallet and keep them in a safe or with a notary. Preferably in multiple locations.
Whenever your coins are stored at a broker, choose a strong and unique password and restrict access with multi-factor authentication. In case your email account gets hacked or compromised, it will prevent the hackers from gaining access to your online crypto wallet.
What predictions do you have for the future of crypto space?
Because of the upcoming European regulatory measures (the MiCaR), we have full confidence that the crypto space will have more roots in the financial industry. We even expect regular banks to offer services to invest your capital in crypto assets.
The new regulation might ensure people’s trust in Bitcoin because they will have more consumer rights. One thing is for sure: there will be no obstruction of the use of cryptocurrencies due to regulatory restrictions, which is very positive.
And finally, what’s next for Bitmymoney?
In the future we plan to launch a new feature on our platform: the use of the lightning network. This will offer our customers the possibility to quickly make micropayments without the hassle of strict KYC procedures.
It will make Bitcoin payments faster and easier for the users. This way, Bitcoin will not only be an investment - it will also be used more as a payment method, both online and offline.