Uppsala, a Singapore based firm is making plans to put an end to crypto-hacking and other cryptocurrency crimes. You might ask, is this what cryptocurrency needs at the moment? Well, the answer is yes.
If there are just two things that cryptocurrency is popular for, then, it the many fraudulent activities which usually come in form of crypto-hacking. Since cryptocurrency became a global phenomenon, it has been taken advantage of by criminals to carry out fraudulent activities. Although to a number of cryptocurrency enthusiasts, these activities are not so old, they date back to 2010 when the first cryptocurrency exchange was established.
As a result of the fraudulent activities that are associated with cryptocurrency, a lot of money has been lost by cryptocurrency exchanges. Just a few months ago, Bithumb and Coinrail lost about $70 million worth of digital currencies after their security was breached. These two South-Korean firms are not the only cryptocurrency exchanges to have been affected by crypto-hacking. In 2014, Mt Gox, a cryptocurrency exchange had to shut down after it lost $460 million dollars to hackers.
These and many more are the activities of hackers in the crypto community. Well, fortunately, a solution is already underway.
How do Crypto Thieves Convert Cryptocurrency to Fiat Money
Cryptocurrencies are not a regular means of payment and have to be converted to Fiat money before they can offer real value to crypto-thieves. Since every single digital currency is traceable, hackers have found a way to go about this. Crypto-hackers have formed a habit of taking stolen crypto to decentralized cryptocurrency exchanges. This is because unlike centralized cryptocurrency exchanges, decentralized exchanges are not well regulated. When patronized, decentralized cryptocurrency exchanges provide criminals with the privacy that they need in other to convert their cryptocurrencies to fiat money.
Well, contrary to what a lot of people expect, hackers do not convert their stolen tokens to fiat money directly. They convert them to other tokens, most times mainstream cryptocurrencies. With this, they can erase every trace of theft. Once this is done, hackers go on to convert their tokens to fiat money in centralized cryptocurrency exchanges.
How Uppsala intends to stop Cryptocurrency Theft
It is amazing to know that the solution to crypto hacking stems from blockchain technology. Although the ability of blockchain to be used in cryptocurrency is well-known, this technology can also be applied in cybersecurity.
Now, taking advantage of blockchain, Uppsala has come up with the Sentinel protocol, the Sentinel protocol is an intelligence program that contains a Threat Reputation Database and all the IP and blockchain addresses that are linked to fraud and theft. This is gotten from a pool of volunteer cybersecurity gurus. Now with the use of sentinel, cryptocurrency exchanges can conveniently tell what addresses have been involved in any fraudulent activity.
How this works is simple, Sentinel Protocols are synced with the platforms of cryptocurrency exchanges. This includes centralized and decentralized platforms. The implication of this is when any of these platforms comes across an address that is linked to fraud, it detects it immediately. This is believed will put a check on the activities of crypto-hackers and bring trust back to the crypto community.