Although digital assets such as Bitcoin have been hailed as the new generation of financial transaction systems, it is clear that they come with their own set of unique risks. On top of this list are the scams and hacks that have unfortunately been running rampant in the sector.
Despite the growing rate of regulations across the sector, these risks are still very much present in the crypto industry. These risks and others such as ransomware attacks and pollution were some of the main points brought up by Senator Elizabeth Warren when she criticized digital assets at a recent hearing, which was held to determine the development of the digital dollar.
Beginning her statement, Warren described digital assets as a very distant alternative to physical cash because they are currently not the most efficient way to purchase and sell goods and services.
She said that unlike physical cash like the dollar, the value of the digital assets is mainly dependent on the activities of traders whose activities are speculative in the market.
Giving a solid point to back up her claim, she mentioned that Dogecoin saw a massive rise before witnessing a decline of about 60% in the market. She noted that even though those activities might go down well with traders, it would not be beneficial to regular people who carry out their legal activities and wish to spend the assets in their day-to-day activities.
Warren said the recent Colonial Pipeline hack would push hackers to start exploiting people
After citing an example of both Bitcoin and Dogecoin, Warren further noted that her criticism was not limited only to these two cryptocurrencies. She explained that the volatility of most digital assets in the market is one deterrent that would hinder them from being a real medium of exchange.
She also went further to comment on the unavailability of consumer protection laws, which would mean that people who suffer from hacks and scams would not have any legal backing. Warrent also touched on ransomware, highlighting a recent event where Colonial Pipeline and JBS were asked to pay a ransom with digital assets.
Capping off her speech, she noted that more hackers would see it as a growing opportunity to venture into the business with every successful attack. The recent ransomware attack on Colonial Pipeline saw the company pay off famous Russian hackers group Darkside with Bitcoin.
Andrew is a writer that does most of his work on cryptocurrency-related topics. While he’s primarily interested in Bitcoin, he also follows major altcoins and the innovative ideas that new cryptocurrency and blockchain projects are bringing to the table.