An XRPaynet Card is a wonderful thing to have when you want to be able to spend your crypto flexibly, with its capacity to convert crypto seamlessly into a wide array of fiat currencies, providing lots of opportunities to spend it in locations all over the world.
However, the benefits of such a card would diminish extremely rapidly without very strong security, as would also be the case for the Volta Wallet through which you might have amassed a small (or large) crypto fortune with smart trading and investment.
The Biggest Crypto Heist Yet
Every so often, a stark reminder emerges of just how important crypto security is. British investors in particular might sit up and take notice, for it is in the UK that police have just secured the conviction of the perpetrator of the world’s biggest cryptocurrency fraud to date.
Zhimin Qian, a 47-year-old Chinese national, pleaded guilty in London to fraudulently acquiring over £5.5 billion worth of Bitcoin. Her crimes were not carried out in Britain, but in China, where she defrauded 128,000 people between 2014 and 2017 before fleeing to the UK in 2018, using false documents to do so.
Discussing the case, Inspector Isabella Grotto, who led the Metropolitan Police investigation, said: “When our team located Zhimin Qian, she had been evading justice for five years,” adding that “her arrest triggered a complex investigation requiring evidence from multiple jurisdictions and the careful review of thousands of documents”.
Winning The Battle Against Fraud
Previously, the biggest crypto theft had been worth $1.46 billion (£1.09 billion), recorded in February this year after North Korean hackers managed to breach the Dubai-based Crypto exchange Bybit.
Although the conviction of Qian means the biggest crypto fraud did not occur this year, the Bybit incident remains the largest instance to come from one single hack.
However, as Comparitch.com has noted, the largest collective amount stolen (in US$ terms) came in 2022, while the peak year for heists was 2023, since when these numbers have dropped.
This indicates that security is getting better, which is essential as the increasing prominence of cryptocurrency has led to an increase in fraudulent activity.
It is important to note this fact, for there will no doubt be some who will argue that crypto may not be a safe thing to invest in if there are lots of fraudsters about. They are wrong. To suggest such a thing would be to ignore the fact that fiat currency gets stolen daily by every means, from cybercrime to knifepoint muggings.
Just as banks and customers need to keep their details safe to avoid fraud and scams, so the crypto sector must do likewise. The only real difference is that when it comes to crypto, all transactions are electronic rather than just some.
Why the XRP System Is So Secure
It is a reminder of just how important the security system is and XRP is designed to work in a unique way that offers better protection than any other.
The system consists of the XRP Ledger, which has what is known as the Byzantine fault tolerance consensus mechanism. Fear not, however: You don’t need to know the history of the Eastern Roman Empire to appreciate it.
For a transaction to be processed, the network of validators has to reach a consensus. These individuals come from a variety of different locations, institutions and backgrounds, so it is almost impossible for them to collude maliciously, even if they wanted to.
The system is designed to tolerate up to 20 per cent of validators failing to do their duty or misbehaving, whether this is deliberate or through a problem like sudden unavailability. If the number went above 20 per cent, no transaction would be agreed.
Moreover, for an invalid transaction to be validated, it would require at least 80 per cent to validate it, which would require active collusion.
Seeing Off Sybil
The validator system is also very good at withstanding what is known as a Sybil attack, which tries to take over a network using fake identities. In this case, it would have to create false validator identities, but this would require humans to trust those validators in carrying out suspicious activity. Without this trust, servers will ignore the fake validators.
Other potential problems would include issues with the system code, but the software developers have taken steps to deal with this, such as making it an open-source code that enables anyone to access and test the software to spot any issues. It is also reviewed regularly.Like any system, the XRP ledger will face challenges. But it is a very robust method of protecting your cryptoassets. Those who want to follow in the footsteps of Zhimin Qian (the fraudulent sort that is, not the ones to her prison cell) will probably soon decide they should try their luck elsewhere.