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The Biggest Crypto Wallet Hacks To Date

The Biggest Crypto Wallet Hacks To Date

Exposing any information to an online network creates vulnerabilities that can be exploited by hackers. In this unsure environment, where hacks are starting to be viewed as an increasingly difficult problem, cryptocurrency holders must know how to secure their digital assets

One of the biggest unique selling points of cryptocurrencies, as it stands, is their high-levels of security and their natural resistance to hacking attempts. Despite this reputation for security, institutions that are responsible for handling cryptocurrencies are generally less successful in their efforts to secure their network. This has led to a number of highly-publicized and incredibly damaging hacks being levied against both cryptocurrency exchanges and wallet providers across the world.

In this unsure marketplace, where hacks are starting to be viewed as an increasingly difficult problem, cryptocurrency holders need to be able to take responsibility for their cryptos. This is in addition to the responsibility that the exchanges and wallet providers have to the customer. As a result, it is more important now than ever to ensure that you are fully aware of how to keep your cryptocurrencies safe before you go crazy on various wallets and exchanges.

The Biggest Crypto Wallet Hacks In History

Coincheck:

Coincheck is a provider of both cryptocurrency wallet and exchange services. The company was established in Tokyo, Japan during August 2014 by co-founders Yusuke Otsuka and Koichiro Wada. Since its founding, the company has gone from strength to strength, with Coincheck eventually being the subject of an acquisition by Monex Group, for the value of $34 Million.

Despite the relative success of the company, it has not always been smooth sailing for the Japanese exchange. In January 2018, the company was the subject of an attack by malicious actors. The hackers made off with over $500 Million worth of digital tokens, making this not only one of the biggest crypto hacks to date, but also one of the biggest heists to date.
Not much information has been provided on how the attackers managed to breach the exchange’s security, although they have confirmed that it was not an inside job.

There is speculation that the exchange was hacked due to their use of “hot-wallets”, which are cryptocurrency wallets that are connected to an external network. These are more vulnerable to hacking than the disconnected cold-wallets.

Binance:

Binance is one of the most recognizable names in the cryptocurrency sector, regularly being considered as the largest cryptocurrency exchange in terms of the trading volume. The exchange was founded in 2017, by co-founders Yi He and Changpeng Zhao. The fact that Binance has appeared in this article shows that even the biggest players in cryptocurrency can fall victim to a hack.

In May 2019, it was reported that hackers had targeted the multi-national exchange, making off with around 7,000 Bitcoin, which at the time was worth over $40 Million. What was even more concerning, was that the hackers drained the funds from the exchange in a single transaction.  The company treated this as a large scale security breach and immediately began investigating the hack.

Upon investigation, it was discovered that the hackers used a variety of methods to collect a large amount of personal information to facilitate the hack. Thankfully, the hack was limited to Binance’s “hot-wallet”, which only holds 2% of the exchange’s Bitcoin holdings. According to Binance, other wallets were not compromised and the damage would be limited through their Secure Asset Fund For Users, which is an emergency insurance fund.

 

Bitpoint:

Bitpoint is a Japan-based cryptocurrency exchange, that is owned by the parent company Remixpoint inc. Japan’s tolerance to cryptocurrencies extends to their changes of legislation and to the fact that all Japanese cryptocurrency exchanges need to be registered with the relevant authorities. Due to Bitpoint’s inclusion on this list, it can be concluded that just because an exchange is legal and registered, does not mean it is completely safe.

On the 12th of July 2019, Bitpoint suspended their services after noticing an issue with their payment systems, with the company later releasing a statement, revealing that $32 Million in cryptocurrency had been stolen from the platform. The exchange was able to locate some of the missing funds, although nobody has been brought to any form of justice for the crime.

The reason for the breach was listed as the unauthorized access to private keys of the exchange’s hot wallet. In the wake of the news, the company stock had devalued by 19% and even stopped trading altogether at one stage. This was due to mass sell-offs in the wake of the hack. The exchange later offered to pay the 50,000 affected customers in cryptocurrency to the value of their losses.

How To Protect Your Cryptos:

Keep Your Private Key Offline:

As has been mentioned previously, exposing any information to an online network creates vulnerabilities that can be exploited by hackers; this is also true to your private keys for your crypto wallet. Your private key should be stored offline and kept in a secure location, such as a safe, or some other location which only you are privy to.

Select a Wallet That Has Effective Security Measures:

The reality is, depending on what type of cryptocurrency wallet you use, your information and your keys will be more or less secure. If you are looking for maximum security, then it may be better for you to use a hardware wallet. Hardware wallets are offline devices and as such are invulnerable to attacks by hackers.

Do Not Use Public Wifi:

If you are utilizing a cryptocurrency wallet on your mobile device, then you need to be incredibly careful and selective about the environments in which you go online. If you are using public wifi, your device has a much higher likelihood of being compromised. You should try to limit your internet usage to private, secure networks to protect your cryptocurrencies.

How to Choose the Best Crypto Wallet to Suit your Needs

How to Choose the Best Crypto Wallet to Suit your Needs

During the very early stages of cryptocurrency popularity in 2016, there were only 8 million different cryptocurrency wallets created. Since cryptocurrencies have become more popular, this number has jumped to 40 million in mid-2019, which is a fivefold increase over a three year period. As cryptocurrencies continue to work their way into the public’s consciousness, the number of cryptocurrency wallets that have been created will naturally exponentially, potentially at an even higher rate than is currently being seen.

As the number of cryptocurrency users requiring wallet services has increased, so have the number of wallet providers across the world. Naturally, with so many options available, it can be hard to understand which wallet is the best one to suit your needs as a user. Below, you can find ways to choose the best crypto wallet that suits your individual needs.

Number of blockchain wallets- Statista

https://www.statista.com/statistics/647374/worldwide-blockchain-wallet-users/

Desktop Wallet

You can download and use desktop wallets on your computer, no matter which operating system you use. In terms of security, they are relatively safe as the wallet can only be accessed on your computer, although as your computer is likely to be connected to the internet, there is always a chance that your private keys may be stolen.

It is true that when using a desktop wallet, your seed keys may be kept in a non-encrypted format, which can leave you at risk. This occurred in 2017 when users of Jaxx wallet experienced losses of $400,000 due to this issue.

Online Wallets

Online wallets are run on a cloud-based system, which makes them incredibly convenient to use as you will be able to access this type of wallet from almost any location, so long as you have an internet connection.

Despite this, storing your private keys online in a centralized manner makes your holdings a lot more vulnerable to attack from malicious actors. Online wallets are normally used by a number of cryptocurrency exchanges and thus cryptocurrency exchanges are regularly being hacked, with as little as eight seriously notable hacks occurring in 2019.

Mobile Wallets

Mobile wallets are incredibly similar to desktop wallets, although as the name would suggest, they are built to work on your mobile phone. With mobile devices being a huge part of the modern world, it isn’t surprising that mobile wallets are some of the most convenient on the market at this time. They are also known for having high-quality user-interfaces.

Another benefit of mobile wallets is that your keys are directly onto your device, although with some mobile platforms having questionable security, mobile wallets can be prone to glaring security issues. Some mobile wallets even store keys on a cloud system, leaving them even more open to attacks.

A 2017 report by Californian security company High-Tech Bridge demonstrated this lack of security with crypto mobile apps, stating that among 30 different cryptocurrency apps with over 100,000 downloads, “93 percent contain at least three medium-risk vulnerabilities and 90 percent contain at least two high-risk issues”.

Hardware Wallets

Hardware wallets are the premium option for individuals that are looking to hold their cryptocurrencies in the long-term, with their enhanced security features. As opposed to software wallets, a hardware wallet will store your private keys on a physical device. A large number of these wallets are designed to keep your cryptos safe, even on a computer that has been infected.

A downside of hardware wallets comes in the form of their prices.

Paper Wallets

Paper wallets are a type of physical wallet that allows you to store your keys in print format, usually in the form of a QR code. Despite your initial thoughts, paper wallets are an incredibly secure method of storing your cryptocurrencies as to spend your cryptos, you will need to transfer the funds to a software wallet.

One of the main, obvious drawbacks of paper wallets is the fact that they can be destroyed, stolen or lost very easily if they are not stored appropriately, which will lead to the overall loss of your holdings.

Costs

The majority of cryptocurrency wallets don’t require you to spend any money to use them, although it should be noted that certain wallets such as hardware wallets will require you to make a small investment to purchase them. If you intend to keep a hold of your cryptocurrency for a long period of time, then it is recommended that you invest in a hardware wallet.

An example of lower-end pricing for hardware wallets can be found with the Ledger Nano S at $59 and the Trezor One costing as much as $78.

Security

Making sure that nobody can steal your cryptocurrency holdings is one of the most important factors to consider when selecting your cryptocurrency wallet. When you are analyzing different options for your cryptocurrency wallet, you should research their security features and their reputation. To ensure the highest possible level of security for your holdings, you should consider a hardware wallet.

Some additional tips to help keep your holdings secure can be found here.

Ease of Access

If ease of access is most important to you, mobile and online wallets are the most suited to your needs. You can get access to them from any location, no matter what device you happen to be using at the time.

User-Interface

A cryptocurrency wallet can have a number of amazing features, yet if the user-interface is frustrating to use, you will hardly find any joy whilst using it. In terms of user-friendliness, mobile and desktop wallets are the best options and require little in the way of initial setup.

Is the Wallet Multicurrency?

If you are going to be storing a number of different cryptocurrencies, then making sure that your choice of wallet can support this is critical. Typically, when you are looking for a wallet like this, you should check user-reviews to ensure that they have a good reputation. If you are looking to store only one coin, check the coin’s website to see if there is a dedicated wallet already.

Hardware wallets generally tend to support more cryptocurrencies than other types of wallets.

The first countries to adapt bitcoin will be the ones who flourish the most

The first countries to adapt bitcoin will be the ones who flourish the most

Cryptocurrencies have become a major talking point since they first pierced popular culture in 2017. Going from a relatively unknown, unstable market the current total worth of Bitcoin alone, as of June 2019 reached $41 Billion. This isn’t counting all of the other cryptocurrencies that are currently active in the industry at this time, combining those to the initial figure would give a large amount of value.

From this value, nations who are quick to get behind the growing buzz of cryptocurrencies will be able to profit, through business tax, the jobs the cryptocurrencies will generate and much more. Some nations are already thinking about this and are exploring ways in which they can profit from the cryptocurrency boom.

How Blockchain Has Aided the Boom in Malta’s Economy

There has been much optimism about the economic growth of the small Mediterranean island in recent times, with growth in 2018 settling at 6.2%. This has been further compounded by the release of the European Commission’s annual growth forecasts for 2019, where Malta has appeared at the top of the list, with a growth expectancy of 5.2%. Ireland is the runner up in this aspect with a predicted growth of 4.1%.

 

Real Malta GDP growth

Source- https://ec.europa.eu/info/sites/info/files/economy-finance/ecfin_forecast_winter_07_02_19_mt_en.pdf


One of the reasons for this explosion in economic growth can be attributed to the warm reception of cryptocurrencies in the country. Even other countries known for embracing technological advancements have fallen behind Malta in this aspect.

A big part of the reason for this is due to the passing of ideal legislation surrounding blockchain and cryptocurrencies by the country’s Prime Minister, Joseph Muscat. This embrace of blockchain technology has allowed Malta to lure a number of well-known, sizable cryptocurrency operations onto the country’s shores. For example, BitBay, Zebpay, and Binance have all relocated from their native countries to Malta, so that they can enjoy a more comfortable regulatory environment.

How Blockchain is Permeating Education in Malta

Of course, all of these business ventures in Malta are going to need employees. In local news, Malta Today has quoted the European Commission’s report, stating that the new job opportunities provided by blockchain firms have been a key contributing factor in the nation’s economic resurgence.

Interestingly, there has also been a movement towards initiatives to improve the growing blockchain market in Malta. Led by Oxford University researcher Joshua Broggi, the institution is going to be named Woolf University and will be aimed at offering a wide variety of courses, both on and off-campus. The idea is to offer tuition to people across the world by offering them a series of personalized tutorials that can be flexibly suited to the student.

Interestingly, the university will be run entirely on blockchain technology, to avoid incurring expensive administrative costs through the automation of administrative processes. Furthermore, the security provided by blockchain technology will ensure that the university’s systems and degrees earned through them will be incredibly secure against attackers. These degrees can also be validated using blockchain technology.

Students and staff at the university will sign-in through the use of smart contracts, that will confirm items to the institution, such as attendance and the completion of any assignments by students. Students will also be able to pay their tutors through the blockchain, whilst the university will provide students with micro-credits that can be directly applied to their degree.

Broggi is planning to open five different sites for Woolf University, however, he has stated that due to the welcoming nature of Malta to blockchain technology, it was an obvious first choice. As one would expect, Broggi initially planned to raise funds for the university through an ICO, however, he eventually managed to find enough private finance so that he could avoid making a public offering.

Woolf University has already garnered the attention of a number of professors from well-established, elite universities, such as Oxford, Cambridge, George Mason University, Kings College London, Leipzig University and Kyoto University.

It should come as no surprise that the running of such an institution would also make a contribution to the Maltese economy by creating jobs for lecturers and generating more revenue on the island itself through tuition fees and student living.

The Future Outlook for Blockchain in Malta

Malta is rapidly earning the nickname of “Blockchain Island” due to its more reasonable approach to legislation surrounding blockchain and cryptocurrencies. The island nation is a great example of the potential for countries to make strides in their national economy by being more open-minded with the development of new financial technology and avoiding the usual trap that a lot of countries fall into, where they regulate the market so heavily that it is almost impossible for it to grow.

The figures from the European Commission support this line of thinking and if the development of cryptocurrencies and blockchain goes further in Malta, it won’t be a surprise to see even more companies relocating to the Mediterranean, to avoid overbearing regulation. 

How To Ensure Your Crypto Is Safe & Secure In Your Wallet

How To Ensure Your Crypto Is Safe & Secure In Your Wallet

Cyber Security is of enormous importance in this modern age. Ensuring the safety of your personal information, account passwords, and digital assets is crucial — especially with the significant rise in cybercrime over the last decade.

According to Accenture, security breaches have skyrocketed by 67% over the last 5 years. 

Cybercriminals are using many malicious tools, such as malware, ransomware, and viruses, to target individuals. But these malicious tools aren’t just designed to access your sensitive information. As the popularity of cryptocurrency has risen dramatically over the last few years, cyberattacks on cryptocurrency holders have also increased. Many reputable cryptocurrency exchanges, including Binance, have also been the victim of security breaches.

Some crypto users have also become victims of fake cryptocurrency wallets — having their holdings stolen as soon as they transfer them. Keeping your crypto and other digital assets safe is imperative. In this article, we’re going to provide you with a list of tips to improve your cybersecurity — keeping your crypto portfolio safe from cybercriminals. 

Tips On Keeping Your Crypto Wallet Secure:

Keep Your Private Key & Recovery Phrase Safe:

This may seem obvious, but ensuring that your crypto wallet’s private key and recovery phrase are kept safe is crucial. To do this, you want to keep multiple copies of both your private key and recovery phrase. The best way to do this would be to write your private key and recovery phrase on a sheet of paper and keep them hidden somewhere secure.
Keeping an offline backup of your wallet keys and recovery phrases in a trust location is essential if you want to ensure the security of your crypto holdings. 

Bonus tip: To further protect your private key and recovery phrase, you can split each into two or more pieces — storing them in separate locations. This is definitely something you should consider if you’re going to store your sensitive data on a computer or online.

Consider Hardware Wallets

Also known as “cold storage”, cryptocurrency hardware wallets enable you to store your cryptos and other digital assets offline securely.
Hardware wallets are becoming increasingly popular amongst crypto enthusiasts looking to store their holdings offline securely — the market is expected to boom to nearly $500 million in 5 years.

Hardware wallet market
(Source: mordorintelligence )

You can easily connect USB hardware wallets to your computer — where you can safely manage your crypto holdings. You will be able to send crypto to your hardware wallet’s address directly from your current wallet. 

We recommend storing larger amounts of crypto on a hardware wallet and only keeping small amounts on your online wallet for day-to-day use. There are many hardware wallet solutions available on the market. The most notable brands include Ledger and Trezor.

Use Two-Factor Authentication

Two-factor authentication (2FA) is one of the best ways to ensure the safety of your crypto wallet. 2FA offers an extra layer of password security to your crypto wallet. Many popular wallets offer two-factor authentication as standard — you can easily set this up in your account settings. You’ll be able to connect your crypto wallet account with a 2FA app such as Google Authenticator. The app will generate time-based one-time passwords, refreshing every 30 seconds. 

Alternatively, many wallet providers will give you the ability to receive SMS or email alerts, providing you with a specific code every time you want to log into your account — keeping you one step ahead of hackers.

Never Store Your Details Online

This goes without saying — storing your private keys or your recovery phrase online could be a bad decision. Notable crypto investors have reportedly had their holdings stolen due to storing their wallet details online. Storing your private wallet data online can leave you vulnerable to having your wallet access by cybercriminals.
Avoid saving your sensitive data on emails, social network sites, or note-keeping platforms such as Evernote.

If you must store your details online, it’s best to follow our advice above — split your data into multiple pieces and store each piece in a different location. Even if cybercriminals can gain access to one part of your data, they won’t be able to access your crypto wallet without all the pieces of your private key or recovery phrase.

Use VPNs When Logging In

This point is extremely important if you’re traveling to different locations — away from your home network — and decide to use public Wi-Fi.
We strongly recommend using a reputable VPN service if you’re going to access your online crypto wallet using a public Wi-Fi connection. Free internet connections are notorious for having cybercriminals breach the network, gaining access to sensitive information from all individuals using the network. 

This is why using a trust VPN provider, is imperative when access your crypto holdings using public internet connections.

Installing Antivirus Software

Installing a trusted, advanced antivirus software onto your computer or mobile device is essential in this digital age. Malware has been on the rise over the last 10 years — with hackers now targeting cryptocurrency users with malware.

(Source)

Antivirus software providers, such as Norton, will equip you will all the essential cybersecurity tools. This will enable you to secure all of the information stored locally on your device and help you protect your device from cryptojackingMost antivirus software providers will also have integrated web protection — using advanced AI and machine learning techniques to detect potential threats, such as malware and phishing attacks — helping to protect all of your sensitive information from hackers. 

Using antivirus software eliminates the threat posed by online criminals when you’re logging into — and using — your online crypto wallet.

Always Download A Trusted Wallet

With the rise in fake cryptocurrency wallets and apps, it’s more important than ever to ensure you’ve downloaded a trusted wallet.
Always double-check the developers behind your chosen wallet — even if the wallet or app is available on a reputable app store such as Google Play or the App Store. CoinSpace, provides a collection of trusted, verified cryptocurrency wallets to store Bitcoin, Ethereum, Litecoin, and more.

Conclusion

You can be faced with many cybersecurity risks — especially when you’re storing your cryptocurrency and crypto wallet data online. Using the tips in this article will help you to significantly increase your cybersecurity measures, reducing the risks posed by crypto wallet hackers and other cybercriminals. Being proactive is the key to great cybersecurity. By using a combination of the practices outlined above — especially cold storage, two-factor authentication, and antivirus software — you will be able to securely store and transact your crypto without having to worry about becoming a victim of cybercrime.

Feature image by Moja Msanii on Unsplash

 

Core, Coins and Crime – The Crypto Wallet Journey

Core, Coins and Crime – The Crypto Wallet Journey

Is it just me, or does it feel like you’ve had hundreds of cryptocurrency wallets?

Every time I find a new coin, hear about a new feature or want to liquidate some funds, I seem to create a new wallet. And it’s been this way for years. In other words, my cryptocurrencies are forever on the move.

For example, in the beginning, Satoshi Client did everything we needed. Until Namecoin appeared. Then Bitcoin actually became valuable, so it was time for a more secure solution. Now, we’re going mobile. I can’t hate on cryptocurrency wallets. They are a necessity and they have to continue evolving. So instead of getting upset, I decided to reminisce a little, to take a step back and see how far cryptocurrency wallets have come.

And they’ve come along way, from the first Satoshi creation to over 40 million wallets on Blockchain.com alone.

Source: https://www.statista.com/statistics/647374/worldwide-blockchain-wallet-users/

First Bitcoin Wallet

Satoshi Client, now called Bitcoin Core was the first wallet designed by the mysterious inventor of Bitcoin.
From its 2009 launch, Bitcoin wallets were attached to the full master node meaning users were required to download and maintain the entire blockchain to access inbuilt wallet generation

Users can still do this, but in the early days, it was the only way to interact with the blockchain. To begin with, this was not a problem as there were minimal history and data stored on the distributed ledger. But as Bitcoin grew, it soon found scalability issues as Ethereum creator Vitalik Buterin explains in 2012

“Because it is a full node, the client must download the entire (currently 6 gigabytes) blockchain to operate, which can take up to a few days the first time you start the client and several minutes to an hour every time you start the client afterwards if you do not keep it running constantly.”

The blockchain download now exceeds 250 gigabytes and only continues to grow as more data is recorded.
The original wallet is somewhat recognizable holding the same basic functionality as we still see in all cryptocurrency wallets ten years later.

A single wallet to send and receive Bitcoin which you could even mine from your home PC.

Multiple Cryptocurrency Wallets

In the following years, others were quick to see the potential of Bitcoin. Developers started to fork the network, facilitating new coins with specific wallets like Namecoin and Dogecoin.

Although the original core wallets served the industry faithfully for years. Growing databases combined with multiple assets required a smarter wallet. Multicoin desktop wallets were introduced to make life simple. Operating with the same basic functionality but with two marked differences. Firstly, users could store multiple coins or private addresses in one neat wallet platform. Secondly, there was no longer a need to download and sync the whole blockchain. Users could now transact without running a full node.

Security Becomes Paramount

The exponential growth of active addresses from 2011 to 2014 shed light on a serious problem.
Private keys were always stored on a desktop file in a file labeled ‘wallet.dat’. There are countless stories about users accidentally deleting this file or malware designed to search for the file.

Plus MT. GOX experienced two hacks in 2011 and 2014, during a period where the infamous exchange handled 70% of Bitcoin transactions worldwide. Custodial wallets and exchanges, like Coinbase, started to offer alternatives. Breaking down the door to the mainstream making it easy for anyone to buy and store cryptocurrency securely. Coinbase has gone on to have over 30 million users and trade more than $150 billion.

Custodial wallets and exchanges, like Coinbase, started to offer alternatives. Breaking down the door to the mainstream making it easy for anyone to buy and store cryptocurrency securely. Coinbase has gone on to have over 30 million users and trade more than $150 billion.

While users can’t accidentally expose or delete private keys with platforms like Coinbase, you don’t gain the decentralized benefits of cryptocurrency.  The alternative? Hardware wallets. A single-purpose computer in an isolated environment to protect private keys.
Amusingly, first named Piglet. A crowdfunding campaign preceded the 2014 release of the product we now know as Trezor. Everyone could have secure, recoverable, easy to use wallets without entrusting 3rd parties.

Cryptocurrency wallets gaining sophistication

Bitcoin hit a tidy milestone in 2019 – 400,000,000th transaction.. and it didn’t need permission from anybody.
With an average of 350,000 daily transactions, you feel there is still a way to go before we see numbers representing mainstream adoption.

The race continues to add more sophisticated features day by day to make using cryptocurrency more accessible. From mobile mulitcoin wallets like Coin Space, to Fintech banking integration, to DEX connection. For example, Coin Wallet offers users security and privacy on the move. Wallet apps like this are growing in popularity as more vendors start to accept crypto payment methods.

Other hardware wallet options now boast in-built exchanges or connections to decentralized exchanges like BinanceDEX. This gives users the ability to trade an abundance of coins without entrusting funds to a 3rd party.

Cryptocurrencies serve the unbanked – why not marijuana businesses?

Cryptocurrencies serve the unbanked – why not marijuana businesses?

Millions celebrated as more and more states legalized it, thousands and thousand shook their head in outrage. As with all divisive topics, the pros and cons are piling up on both sides but the truth is this: marijuana is here to stay and strive and so does the multi-billion dollar business that’s built around it. But the cannabis business has its own problems that can’t be ignored – namely the lack of banking services available to such entrepreneurs.

But the solution might already be here, hidden in a technology and innovation we all love. One divisive topic paired with another.

Cryptocurrency and blockchain might just be the exact thing that marijuana businesses are looking for. And here’s why.

Why can’t cannabis businesses get banking services?

Although marijuana usage is still deeply rooted in disapproval (everybody can judge for themselves whether they agree with that or not), using weed for medical and recreational purposes in many states across the country is completely and fully legal.

But unfortunately selling legal merchandise is not the only requirement of running a successful business. Unless you only want to deal with cash-based purchases (which is actually an issue in the sector that we’ll touch upon later), the need for banking services to carry out digital payments is crucial.

There’s only one small problem here: selling and buying marijuana is still illegal on a federal level. And as the federal government oversees all US banks and credit unions, the banks are, to somewhat level rightfully, squeamish to provide services to marijuana businesses – even if purchasing weed is perfectly legal in that given state and under that specific legislation.

According to a CNN report, only 1 in about 30 banks accept a marijuana business as a potential client – and even that one charges premium for that. That also leaves the other 29 in a vulnerable position – the position of the unbanked.

Selling and buying marijuana is traditionally cash-based. Illegal merchandise is usually like that for all the obvious reasons, and traditions like that are hard to erase. But an industry that is estimated to be worth several billion dollars is not something that can be carried out solely in cash – entrepreneurs and business people in the sector need a solution for conducting digital payments.

The banks are not willing to provide that solution. Lucky for us: banks are not the only option here.

Stablecoins and blockchain might just be the saviour for the marijuana business

Stablecoins are a great alternative for these businesses – and not simply because, due to cryptocurrencies being anti-discriminatory, they are truly available to everyone no matter the product they are selling.

The problem of not having access or being denied access to banking services is one of the original issues that bitcoin and other cryptos set out to solve, so it fits perfectly into the banking problem of the marijuana businesses across the US and even Canada.

Stablecoins – those coins whose value is tied to a traditional currency or commodity like the US dollar – are again a little divisive in the crypto community. While they definitely have advantages – no one can deny that – they are, in a way, against the whole ‘to the moon’ ideology that is deeply rooted in the crypto community. As they are tied to a traditional currency, their value will never double or triple and they will always be partly influenced by governmental and centralized financial decisions. But because of the very same reason, they are also protected from the volatile nature of the ‘true’ cryptos – which might make them just the perfect solution for marijuana businesses that need a trustworthy currency to conduct their business with.

And misfits have always liked each other – the cannabis business and stablecoins could truly be a match made in heaven.

Stablecoins like USDC and Tether are available, they are legal and they are also way cheaper and easier to handle than cash. As they are cryptocurrencies, they also have the additional benefit of anonymous transactions which is something that a lot of customers in the cannabis business still prefer to have.

Using blockchain system is also beneficial as transactions are almost instantaneously verified – so there’s no worrying about a declined credit or other traditional banking related problems.

Bitcoin can also be a good solution as it is widely accepted and considered to be the most trustworthy out of all the cryptocurrencies. It can be a great way of turning revenue from cannabis businesses into an investment. The only problem is the volatility of bitcoin which might not make is the most suitable for the cash flow of a business.

Using Coin.Space for digital payments as a business

So maybe now you are convinced that stablecoins and cryptos in general could be a great solution for the banking problem of the marijuana business. But how would that work exactly?

If you are not familiar at all with how blockchain works and how exactly a cryptocurrency transaction is carried out, you might want to dedicate a bit of your time to research those topics in depth. But once you are familiar with the basic principles and concepts, a really user friendly solution can be Coin.Space.

The Coin Wallet offers an integrated and unified crypto wallet service where customers can buy and sell more than 20 thousand tokens including the most popular ones like bitcoin, litecoin, bitcoin cash, ethereum and ripple and several stablecoins. It also places huge emphasis on security and anonymity which is a big advantage for a lot of customers in the sector.

Sending and receiving crypto payments are also made very easy with the wallet – you only need to know the other party’s crypto address to carry out a transaction. After the transaction is completed, you can also easily exchange the different cryptocurrencies which means that your customers do not have to pay in one specific coin but they can choose from a variety of different currencies.

Dealing with your finances or generating cash flow directly in cryptocurrencies solves the issues of digital payments – without having to deal with banks that do no want to associate with cannabis businesses due to federal regulations. This can be the perfect method for businesses who are looking to switch from a heavily cash-based system to a digital one with easy, affordable and available digital payment systems using cryptocurrencies. The added benefits of traceability and security of using blockchain technology is really just the cherry on top.

While banks can always refuse service to any customer, cryptocurrencies are available to everyone – no matter where they live, no matter what legislation they are under and no matter what they sell.

Federally chartered banks cannot and will not accept money made from selling cannabis (even it is completely legal  for recreational or medicinal purposes). Crypto wallets can and will.

Crypto has long been the solution for the unbanked – now it’s time the unbanked knows about it too.