Crytocurrency

Cryptocurrency Adoption in Brazil Is Spurring: How to Ensure Cyber-Security?

With more than 212.5 million inhabitants, Brazil is the sixth largest nation by population. According to the most recent KuCoin report 16 percent of Brazil’s population, roughly 34.5 million are considered to be crypto-investors.

The inflation rate in Brazil is currently at 10% as well as The Brazilian Real is slipping. The popularity of cryptocurrency in Brazil is expected to increase. This month, American-based cryptocurrency platform Gemini released the study, that included the study of almost 30000 people in 20 countries.

According to the research, Brazil and Indonesia are definitely leading the pack with 41% of those who surveyed from these countries said they had Bitcoin or other cryptocurrencies.

Need For Cyber-Security Rises

The rising popularity of crypto increases the risk of cybercrime. Cyber security and theft of crypto breach are a constant security issue, with more than 14 billion dollars worth of crypto stolen by 2021.

Recently, Brazil’s authorities took possession of an gang led by commercial entrepreneur Francisley Valdevino da Silva nicknamed the “Bitcoin Sheikh.” The group operated an investment platform that was based on digital assets. After getting noticed for its the high yields, fraudsters used the money of investors to purchase luxurious cars, gold bars and costly watches.

Decentralized Finance (DeFi) is still in its beginning stages however, according to information from DeFi Llama the sector currently has over $108 billion worth of digital assets circulated across several projects. Chainalysis’s study found that DeFi’s protocols were targets for seven out of the 10 largest cryptocurrency thefts between January 2021 until March 2022.

Because institutions are frequently targeted and institutions must secure the custody and asset management infrastructures to meet the demands while minimizing cybersecurity risks.

Creating Secure Asset Management Infrastructure

The most significant cybersecurity threats affecting DeFi are the intrusion of security systems that protect crypto-exchange transactions and the theft of crypto. In order to carry out the most recent DeFi hacks, hackers take advantage of weaknesses as well as vulnerabilities in smart contracts and protocols including cross-chain bridges, or flash loan protocols. It is a shift away from relying on individuals who fall victim to phishing attacks, to directly attacking DeFi’s protocols.

Brazil is lagging in the development of its regulatory foundation despite expanding crypto-based adoption. Authorities and governments are putting greater importance on DeFi projects as well as the regulatory framework. Consequently, DeFi businesses should act independently to protect the interests of their customers.

Monitoring tools for on-chain transactions should be part of security measures that protect smart contracts once they are deployed and avoid centralization. To attain that level of control, several Brazilian cryptocurrency holding companies have started developing better cybersecurity of blockchains to safeguard their custody of digital assets solutions by cooperating with specialist companies that have popped on the scene.

Notably that some of these firms, such as GK8 and GK8 are using Cold Vault technology, which allows them to create verify, and transmit blockchain transactions, without connecting via the web. In ideal circumstances, this kind of technology leaves no room for hackers to take advantage of the DeFi protocol and make the digital assets that are stored in a secure.

On the Flipside

Brazil has witnessed an increase in the use of cryptocurrency however the regulatory framework has been uncooperative. In part, due to the banks’ refusal to cooperate with crypto-related businesses and the absence of clarity in the regulatory environment has been detrimental to the cryptocurrency market.

Why You Should Care

Brazil is among the emerging countries that is moving forward with the adoption of cryptocurrency. Second-highest in Brazil, Rio de Janeiro is a major player in international competition to draw in Bitcoin. Based on Chainalytic, Brazil is 5th in the world in terms of value on-chain with a total of 90 billion dollars in revenue.

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