Ethereum has really been feeling the sting lately as yet another theft, this time $8.4 million, hits the cryptocurrency. While I love the fact that cryptocurrency is a stand alone entity not backed any specific country or nation, it’s value depends greatly on the security around it and the confidence people have in it. While $8.4 million isn’t a huge number by monetary standards when you compare it to things like CEO Fraud at about $5.3 billion lost in the last few years, or ransomware which is running at about $1 billion per year, it is a big when you consider the reputational damage to cryptocurrency as a whole.
Think of it this way, investors have done a lot to boost and stabilize the price of Bitcoin and Ethereum as they are seeing a return on the investment. Investors don’t mind some risk as that comes with the territory, but when sums like this are lost several times in the course of a few weeks, it shakes the trust.
Consider that the total value of Ethereum is about $19,141,290,491 at the time of this writing and about $47,000,000 of that has been stolen in the last month. That can shake the confidence a bit. Looking at the price graph, it’s being reflected.
Unless these losses are stabilized, cryptocurrency is in danger of taking several steps backward with respect to its reputation and value to investors. This in turn will impact it’s value even more significantly.
Erich Kron is the Security Awareness Advocate at KnowBe4, and has over 20 years’ experience in the medical, aerospace manufacturing and defense fields. He is the former security manager for the US Army 2nd Regional Cyber Center-Western Hemisphere.