Demand For Bitcoin Hardware Wallets Rise in South Korea, as Users Develop Awareness

According to security-focused researcher Kim In-soon at South Korea’s ETNews, the demand for bitcoin hardware wallets is increasing rapidly in South Korea, as users have started to avoid local cryptocurrency exchanges to store their funds.

Exchanges Are Not Secure

Over the past two years, even the largest cryptocurrency trading platforms in South Korea including Bithumb have suffered several data breaches and hacking attacks. In other regions like the US and Europe, only a handful of exchanges have not experienced major hacks to date.

Centralized cryptocurrency exchanges and wallet platforms are vulnerable to hacking attacks and many kinds of cyber attack methods because of their reliance on a single point of failure. Since cryptocurrency exchanges are managed by a group of administrators or a company, their servers, databases, and infrastructures are all managed centrally.

The centralization of various components of trading platforms provide an opportunity for hackers to break into the system and potentially steal user data, sensitive financial information, and in the worst scenario, reallocate user funds.

An easy alternative to cryptocurrency exchanges is non-custodial cryptocurrency wallet that allows users to remain in full control of their funds. Non-custodial wallets do not store or protect private keys and back up codes on behalf of users. Users are provided with their private keys and 12-word passphrases that can be utilized to backup or recover their funds, in case users cannot access their accounts of the platform is compromised by hackers.

Web-based wallets can be a target of DDoS attacks or server outages, that may significantly slow down the process of checking balance, withdrawing funds, and sending transactions. Last year, in November 2017, Blockchain, the second most widely utilized cryptocurrency wallet behind Coinbase, experienced a server outage that briefly disabled customers from viewing their balance on the wallet.

Non-custodial wallets like Blockchain do not store or manage user funds and private keys but provide full access to funds to their users. But, because of their reliance on centralized servers, occasionally, server outages could cause inconveniences.

Hardware Wallets

Due to the limitations and weaknesses of centralized wallets and cryptocurrency exchanges, many users in South Korea have started to prefer hardware wallets and cold wallets over centralized hot wallets.

Over the past year, at least three major cryptocurrency hardware wallets targeting the local market have launched, including Penta Cryptowallet, KeyPair, and TouchxWallet. In acknowledgement of the rising demand for hardware wallets, Ledger, the largest cryptocurrency hardware wallet manufacturer based in France, has decided to enter the South Korean market.

In a highly volatile and rapidly growing market in cryptocurrency, the shift in trend from easy-to-use centralized wallets to secure hardware wallets can be considered as an optimistic indicator, as it demonstrates the willingness of users to develop awareness of security.

British IT Hardware Supplier To Build Largest Bitcoin Farm In The UK

Bladetec, a British IT hardware supplier, has recently revealed plans to build a Bitcoin (BTC) farm in the South East of United Kingdom, The Sunday Telegraph reported March 17.

The project dubbed the Third Bladetec Bitcoin Mining Company Ltd (TBBMC) aims to raise  £10 mln or roughly $13.9 mln from investors to build and operate the farm over the next two to three years. The developers then plan to sell off the mined coins as well as the mining equipment to provide investment returns, says the funding platform for the project, Envestry.

Bladetec founder John Kingdon claims that investors “don’t risk losing any money”. According to his calculations, sale of the mining equipment alone would result in profit; it’s unknown whether he took into consideration factors such as decreasing hardware prices and increasing mining costs that require more electricity and computing power every year.

TBBMC expects investment returns to follow one of four scenarios depending on the value of Bitcoin in the next two years. The scenarios range from a per annum price drop of up 40 percent, to a per annum price increase of over 50 percent.

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Founded in 2002, Bladetec has provided IT support, supplying, and consulting services to such bodies as the UK Ministry of Defence, NATO, and The National Grid. According to Evenstry, TBBMC will be the first Bitcoin mine in Europe funded by investors in a limited company protected by UK law.

According to the project, the TBBMC facility will cover 3,500 square feet at three locations in London, Surrey, and Suffolk. Considering the high price of mining one bitcoin in the UK, which reportedly amounts to about $8,400, most of the raised funds would be spent on energy costs, as the company is planning to mine 1,280 bitcoins, writes The Telegraph.

Federal Trade Commission Files Lawsuit, Targets ‘Deceptive Cryptocurrency Schemes’

· March 18, 2018 · 9:30 pm

The FTC has filed a lawsuit against two companies that have reportedly defrauded somewhere around 30,000 people worldwide, affirming their intent to disallow major cryptocurrency scam projects.


Cracking Down on Crypto Scams

The FTC’s primary focus is to protect consumers and enforce the legal framework that creates a competitive market, and they’re starting to take notice of the cryptocurrency space. There have been many questionable projects and quite a few outright scams. Some have promised absurd returns, but the revenue structure relies on users to recruit more users into the platform, and those users recruit more users.

Federal Trade Commission (FTC) Seal

According to The Washington Post, the lawsuit is targeted at what the FTC calls “chain referral” scams involving digital currencies. The most infamous crypto scam in recent times is Bitconnect, which imploded back in January of this year. Bitconnect is not being investigated in this recent suit, but people users still lost hundreds of thousands of dollars. The price of the coin hovered around the $320 mark and within minutes it dropped over 80%, continuing to fall to $1.62 where it sits today.

Offering Ridiculous Returns to Hopeful People

The FTC claims that the illegal activity has affected nearly 30,000 consumers around the world. Action has already been taken against some individuals involved with these projects, as a federal court has ordered four men to stop their operations in Florida. According to the lawsuit, these men promoted cryptocurrency scams on popular social media platforms such as Youtube and Twitter.

Bitcoin Funding Team and My7Network are the two companies under the microscope of the government, making claims to consumers that they could turn a mere hundred-dollar investment into $80,000 monthly income. While that would be great, the actual payouts never amounted to that much cash.

Offering Ridiculous Returns to Hopeful People

Steps are being taken by governments and major companies to try and stop the flood of cryptocurrency scams. Earlier this week, Google followed in Facebook’s steps announcing they are no longer allowing bitcoin and crypto related advertisements on their advertisement platform. The technology behind Bitcoin could potentially be world-changing, but at the moment there is a lot of money flying around and that’s always going to attract people looking to strike it rich.

What do you think about this crackdown? Is this needed in the crypto-currency space? Let us know in the comments below!


Images courtesy of Pexels, Wikimedia Commons

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