Cryptocurrency has really risen in popularity in recent years with many casual, at home investors starting to get involved thanks to the many exchange and wallet sites now available. Unfortunately though, when this happens you start to see a large rise in scams and fraud with criminals taking advantage of the lack of knowledge a person might have in the area. However, as everybody knows, this isn’t just cryptocurrency, it happens on a daily basis with bank accounts for traditional currency. In fact, in 2021, UK victims lost a total of £1.3bn to bank fraud in the UK alone. So we’re going to look at which one is actually more secure and safe to own.
One of the main selling points of cryptocurrency, and the reason why it became so popular in the first place is that it is untraceable, you can pay with Bitcoin for example, and nobody knows anything about you, you don’t need a bank account in your name or a residential address or anything, you can pay for whatever you like without there being a paper trail. The is the major upside for many people, the downside however is that because your details aren’t needed, effectively anyone who has access to your cryptocurrency owns it, it is more similar to cash in that sense. I could have a wallet stored on a USB drive with £2m in Bitcoin in it and I just need the key (password) to access it. If someone else were to get their hands on that USB drive and the password then they would effectively own that £2m and there is nothing I could do, there is no financial authority to get in touch with, or bank to claim money back from.
There are however now quite a few laywers and wealth recovery solicitors who are specialising in things like investment fraud and aiming to try and recover some, if not all of the money you have lost if you have been a victim of fraud.
As me mentioned earlier in the article, billions are lost every year from people gaining access to UK bank accounts through identity theft, cloning cards or via online banking. The security flaws of normal banking are well known and as it is so widely used there are bound to be far more instances when compared with cryptocurrency. The one area where traditional currency does have a major advantage over cryptocurrency is if anything happens to your money. There are companies and processes in place to help you get your money back, this isn’t always the case but as everybody’s name is tied to a bank account and there are multiple layers of security it is easier to track unusual payments and alert people when something unusual happens. Cryptocurrency is completely unregulated and therefore there is very little protection if you lose your money, this is the reason why no 1dt world western governments have allowed crypto to be used as a form of official currency.
Ultimately, they both have advantages and disadvantages but for most people we’d say traditional currency is better as you have a lot more protection and more chance to get your money back in the event of fraud.