Cybersecurity for distributed virtual currency businesses

Emerging best practices adopted by businesses operating in the virtual currency economies have created de facto standards that other businesses can look to for guidance

Functioning as a hybrid form of property and currency, Bitcoin and other virtual currencies are entirely digital, operate over a user-maintained decentralized peer-to-peer network and function independently of any governing body. With virtual currencies amassing considerable market value, venture capitalists and entrepreneurs are rushing into the virtual currency ecosystems.

Security over these virtual currency assets, however, is a growing concern for investors and businesses built around virtual currencies. According to an independent investigation posted on forums, 818,485.77 Bitcoins (with a current value of about $500,000,000.00), have been stolen since August 2010. Without any centralized authority, victims of theft of virtual currencies have little means for redress. For a business operating in the ecosystem of virtual currencies, a theft event can cause crippling financial and reputational damage.

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Andrew Hinkes

Andrew Hinkes is an attorney in the Dispute Resolution Practice Team at Florida business law firm Berger Singerman, where he focuses his practice in complex...

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