We asked Paul Veradittakit of Pantera Capital, the
leading institutional investment firm that focuses on blockchain and
cryptocurrencies, about the three most important questions to ask yourself when
investing in cryptocurrency.
Here are his answers.
1) Know your risk appetite
As with any investment, investors need to consider their
ability to shoulder losses. Just how much can you stand to lose in the event
that things go south? To this end, Paul advises people to ask themselves:
“What’s your risk appetite? This is a new space and there
are a lot of unknowns.”
We often hear about the risk inherent in cryptocurrency.
When investing in any particular coin or project, it’s important to keep in
mind your appetite for risk.
How much are you willing to risk? While many
cryptocurrencies and related projects have what’s referred to as “asymmetric
upside” (meaning the potential rewards outweigh the potential risks), that
doesn’t mean you’re guaranteed to win (ever).
There have been too many failed blockchain projects to
count. That’s why being diversified counts.
2) How diversified do you want to be?
The second question investors should be asking is how
exactly they want to invest.
Diversification is often best accomplished via an investment
vehicle like an exchange-traded fund (ETF) rather than buying a coin on an
exchange or through an ICO.
“Do you want to invest in companies or projects directly, or
do you want to buy into a vehicle like a fund or an index?”
This is a point many people might never stop to consider.
Simply exchanging fiat for a coin on an exchange is not the only way to invest
in cryptocurrency, although it might be the most common.
This also plays into the third question.
3) Are you investing in things you’re passionate about?
This one is simple. Yet most investors might never consider
it.
“It really helps to understand what you’re investing into…if
you’re not willing to do the research, you should invest in an index or a fund
or something that is diversified.”
Legendary investor Warren Buffet is well-known for his
famous quotation saying that he only invests in businesses that he understands.
In today’s technological era, all of our most important
information exists in cyberspace. This is the case for individuals, small
businesses, and transnational corporations alike. A breach of sensitive data
can create myriad problems for a company, such as:
·Damaging the credibility of an organization and
making its management look incompetent or careless (a PR nightmare)
·Scaring away customers who are mindful of online
security and privacy
·Giving competitors an unfair advantage
(corporate espionage)
·Distressing budgets and cash flow due to dealing
with the aftermath of a hack
·In the case of ransomware, directly draining
profits
And many more problems that you might be dealing with for a
long time.
History has shown that no company is immune to the threat of
a cyber-attack. For example, a number of high-profile hacks have happened in
the not so distant past.
The
Yahoo hack occurred in 2013 and involved over one billion user accounts
being compromised, making it the largest data breach to-date.
Add to this a long list of cloud-hosting companies such as Cloudflare
and Dropbox being compromised, and it’s not hard to see that increasing your online
security is now of the utmost importance.
You may be wondering how to prevent a cyber attack. Of course,
it is a complex matter involving a large number of variables.
That said, there
are some affordable, common-sense actions that any organization can take in
order to defend themselves from a significant portion of potential
cyber-attacks. Here are four ways to increase your online security.
Use Reliable Detection Methods
When a cyber attack occurs, it’s vital that you be made
aware of it as soon as possible. Hacks can often go undetected for weeks or
even months. Most companies do not understand this.
To be alerted to intruders opening files in your system, all
you have to do is use a free and easy tool called Canary Tokens.
Photo from StationX.net
Created by
online security company Station X, these tokens look like regular files – PDFs,
Word Documents, emails, photographs and more. In reality, however, they are
hacker traps. When anyone accesses the canary token file, you will instantly be
sent an email notification.
Detection is not a preventative measure per se, but it can
mitigate further damage once a breach has occurred. Being able to shut systems
down or isolate vital infrastructure can help limit the destruction caused by an
attack.
Install Anti-Malware Software and Firewalls
One of the most important features that can keep hackers out
is a firewall. Your entire network should have a firewall (network-based
firewall), as should each device within it (host-based firewall).
Premium versions of most anti-virus programs also provide
real-time scanning capabilities that can detect and prevent malware the second
it invades your system. Many quality
software options exist.
You will have to consult with an expert and decide
which program is best for your organization. Some of the most well-known and
reputable services include names like Malware Bytes, Avast, and Clam XAV for
Mac (no affiliate links here – I’m not an affiliate marketer).
It may be necessary to hire a full-time professional online
security expert to customize and maintain your firewall, anti-malware programs,
detection methods, and so on.
Conduct Routine Software Maintenance
This might be the most important and simplest solution of
them all.
According to the second annual Nuix Black report on online
security, most all high-profile data leaks did not occur due to some sophisticated
hacking method. Instead, they happened because someone in the company failed to
conduct routine maintenance. Simply neglecting to install a software upgrade or
patch can have catastrophic results.
The solution, as you might have guessed, is simply to make
sure you update all operating systems, web browsers, firewalls, anti-malware
programs, and so on as soon as any updates are made available.
Educate Employees On Common Phishing Tactics
Up to 88% of all hackers claim they use phishing tactics to
gain information
about a target before they attack it, according to the same report. That
means that avoiding phishing tactics could decrease the odds of falling victim
to a successful breach by as much as 88%.
For employees who conduct any business on your network, phishing
avoidance education should be a mandatory part of their training. They must
be able to react appropriately to threats such as phishing emails, malicious
links, phony sites, and callers impersonating authority figures.
These social engineering tactics are often used by hackers
for a reason – they are simple, cheap, and effective. No amount of online
security can prevent a naïve employee from giving an intruder confidential
information or even direct login credentials.
Implement These Methods Today to Prevent Cyber Attacks
Note that three out of these four methods cost nothing to
implement – educating employees, conducting routine software maintenance, and
using Canary Tokens. Using these in addition to installing premium anti-malware
programs and firewalls and hiring an online security expert will go a long way
toward preventing cyber attacks and increasing your online security.
