Top Security Issues When Receiving Cryptocurrency Payments

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Cryptocurrency is being accepted as payment by many businesses and service providers, including Microsoft, AT&T, and Home Depot. This makes a lot of sense, considering how cryptocurrencies may be used to generate real-world money. Perhaps now is a good opportunity for companies to figure out how to accept cryptocurrency payments, process them, and turn them into fiat cash.

Nevertheless, there are several open questions. How can you allow consumers to pay with Bitcoin or other digital money in a secure manner? Where can you get information about the potential dangers that come with cryptocurrency? The only way to know is to investigate.

Who Accepts Bitcoin Payment?

It is now possible to purchase from Microsoft, PayPal, Mastercard, Starbucks, AT&T, and Amazon with cryptocurrencies. In addition, as much as a third of local establishments already accept Bitcoin as payment. Meanwhile, Bitcoin may be used to top off your Microsoft account, allowing you to make online purchases.

How to Take Bitcoin as Payment?

Two methods exist for accepting bitcoin, each with its potential vulnerabilities. Similar to traditional wallets, crypto wallets store and transport digital currency. Therefore, they are a secure location for keeping money out of reach. Third-party systems, such as cryptocurrency exchanges or payment gateways, facilitate cryptocurrency transactions. Let’s take a look at cryptocurrency exchanges and cryptocurrency wallets independently.

Cryptocurrency Wallet

To keep all of your bitcoin safe and easily accessible, you’ll need a cryptocurrency wallet, which may be either an app or a physical device. “Hot” wallets refer to the software implementation of cryptocurrency wallets. Another option is to invest in a “cold” wallet gadget (USB stick). When you want to be paid in cryptocurrency, you provide your wallet’s unique public cryptographic address to the sender. Accepting payments by QR code or manually inputting the cryptocurrency address is also an option.

To send or receive cryptocurrency, you don’t necessarily need to use an exchange while using a cryptocurrency wallet. When you create a cryptocurrency wallet, you’ll be asked to choose a password and given a “seed phrase.” With the seed phrase, on-chain money may be retrieved even if the user has forgotten their password or lost their wallet device. However, the coins may be permanently lost if the seed word is likewise misplaced or forgotten.

Security risks with cryptocurrency wallets include:

  • If you forget your passwords or seed phrases, you might lose access to all of your money forever.
  • Theft or damage to wallet devices or PCs running wallet software might result in monetary loss.
  • Despite its security, hardware crypto wallets can be compromised.
  • Payments are anonymous since the transaction takes place alone on the blockchain.

Phishing attacks dupe victims into providing credentials on bogus software wallet platform websites. If a hardware wallet is connected, stolen monies may also result from compromised credentials.

When cryptocurrency addresses are stored on a computer, malware can find them and replace them with the attacker’s wallet address. This causes money to be transferred from your account to the attacker’s wallet.

Seed Phrase Security

The security of seed phrases is crucial. Consider the situation when you have millions of dollars in your wallet. Someone who obtained your seed phrase may potentially empty your bank account. Some recommend jotting it down and keeping it in a secure location, such as a safe. Some recommend storing your seed phrase in an encrypted file on the internet. However, if an adversary obtains your login details, they can delete your online data.

What Exactly Are Burner Crypto Wallets?

Some people make up crypto burner wallets that may be utilized for a single or group of transactions for folks concerned about security. These fewer complex apps work as fully functional digital wallets without requiring the user’s secret word or technical know-how. The usage of a “burner wallet” is not limited to special events but is instead practical for use in everyday business. The funds may be moved to your primary wallet, and the burner wallet can be deleted at the end of the day.

Payment Gateway and Exchange for Cryptocurrency

A cryptocurrency exchange is a digital platform that allows users to sell, purchase, or convert fiat currency into digital currency. A web-hosted cryptocurrency wallet may also be provided via an exchange. One convenient feature many markets offer is the ability to connect an external or physical wallet to your exchange account. A payment gateway is a program that accepts and processes financial transactions, and it is a crucial part of any cryptocurrency exchange.

The primary benefit of a cryptocurrency exchange is the time and effort saved. To receive funds in a crypto wallet, for example, it must be able to accept each form of currency. If someone wants to pay you with Ether, you’re out of luck if your wallet only takes Bitcoin. Another disadvantage is that cryptocurrency wallets cannot be used to exchange one currency for another. However, an exchange may take deposits in various currencies and instantaneously convert them into another cryptocurrency or fiat currency. Exchanges also offer API and e-commerce integration services.

Some of the security problems related to cryptocurrency exchanges are as follows:

  • All wallets on the exchange might be compromised if malware affects the exchange.
  • A greater number of attacks can be made on an exchange. For instance, if only one employee’s credentials were hacked, the entire exchange would be at risk.
  • Customer service impersonators are a common guise used by cybercriminals to steal victims’ financial information.
  • If the virtual currency exchange has been linked to ransomware payments, the U.S. authorities may take action against it.
  • Crypto exchanges are vulnerable to software vulnerabilities buried in their APIs or integrations.
  • Crypto Trojans, embedded in legitimate-looking programs, allow attackers to steal critical cryptocurrency information such as user passwords, personal information, and current balance.

How to Get Paid in Cryptocurrency in a Secure Manner

Taking bitcoin payments may seem like a bad idea if you’ve thought about the potential dangers. Meanwhile, traditional internet banking has its share of security flaws. As an illustration, the crypto mentioned above, Trojan, also affected financial institutions. Furthermore, phishing may occur in just about any virtual environment. Any crypto platform you use should have strong security, such as encryption and multifactor authentication.

A physical wallet may be the best option for optimal bitcoin security. Burner wallets, like cryptocurrency exchanges, can be used for day-to-day transactions, with funds being moved to a cold wallet at the end of the day. Meanwhile, the evolution of regulations is making it easier to spot cyber currency fraudsters.