The world of cryptocurrency is relatively new, which is one of the things that makes some people wary about it, wondering what the longer-term prospects are for Bitcoin, Ethereum, and various other currencies.
Others, however, have been willing to dive in, and while some have had their fingers burned by currencies that didn’t stand the test of time, others have made highly successful investments.
Either way, the fact that crypto is new owes almost everything to the fact that the technology has not been with us very long. As a digital currency not backed by any central bank, crypto can only be worth your investment, either as an asset to hold or as a means of exchange, if it can be kept secure.
Blockchain has been the most prominent security technology involved, but the XRPaynet system is arguably the most secure of all, providing extra protection for investors and traders.
Beware The Crypto Crooks
It is not hard to see why this is needed. Look at the news almost every week and you will read or hear about some major scam, fraud, or act of extortion hitting the crypto world. In February this year, the biggest crypto hack to date occurred, when the currency exchange Bybit lost $1.4 billion to North Korean hackers.
This month, it wasn’t North Koreans but a South Korean who was in the spotlight as cryptocurrency mogul Do Kwon pleaded guilty to fraud over the $40 billion collapse of TerraUSD in 2022, a currency that had been promoted as a ‘stablecoin’ but proved anything but.
Other recent cases around the world have seen Abhishek Sharma, a suspect in a $228 million crypto fraud case, being denied bail by a court in India while the chief suspect in the case is still at large, while the US department of Homeland Security has just seized $1 million in cryptoassets while taking down the BlackSuit ransomware gang.
Cyber Crime Threat Requires Strong Response
These and other crypto crimes don’t mean that crypto is necessarily more vulnerable to the crooks than fiat currency; after all, as long as there has been money, there have been people trying to steal it and major acts of fraud, hacked accounts and ransomware are an unfortunate fact of life for any kind of currency.
All this means cyber security is a huge issue for individuals and companies alike and that means ever more sophisticated attacks need to be repelled by ever more effective forms of defence. This is true for fiat money and crypto alike.
The fact that there have been some successful crypto hacks shows that strong security is needed, but that also acts as a reminder of just how important it is to have a ground-breaking system like XRP.
How The XRP Consensus Protocol Works
If you are new to it and considering having an XRP account or card, this is how the system works: Like other security systems, it uses encrypted Blockchain technology, but it also has an additional feature other systems do not possess, the Consensus Protocol.
As XRP Authority explains, this involves using a decentralised group of validators, all independent of each other, spread around the globe, to approve transactions.
It works by majority agreement and features an element known as Byzantine fault tolerance. This means up to 20 per cent of the validators could be acting maliciously without the network losing its integrity.
Not only are these validators trusted and spread out geographically, but their backgrounds and interests vary. They can include developers, financial institutions and universities.
This dissipated form of control minimises the power any of the validators has and makes it impossible for a single rogue actor to get the kind of control that can be catastrophic in other Blockchain systems, where a ’51 per cent’ attack can see anyone gaining control of just over half the system being able to make a plethora of fraudulent transactions.
Other benefits of the system mentioned by the XRP Authority include the fact that it is a lot less energy-intensive than other crypto security systems and, therefore, better for the planet.
A System You Can Trust
Growing numbers of people are becoming XRP users and trusting in this unique and powerful system that is designed to thwart even the most determined of attackers, who may quickly conclude that they are better off trying to hack into someone else’s system.
Living in a more technological world provides many great possibilities, not least in terms of the kind of transactions and investments you can make in crypto, as well as converting it into fiat money when required. But this comes with new threats, so it should be very reassuring that XRP is so robust.