The Importance of Private Keys

Cryptocurrencies offer a world of opportunities. Quick and easy payments, innovative financial services, and inclusivity to previously unbanked regions in the world are all made possible by the crypto ecosystem.

But with these opportunities come challenges and risks. Many crypto platforms lack strong operational, governance, and risk practices. These problems have emerged with huge ramifications in 2022 with the collapse of Terra Luna — one of the biggest stablecoins — and FTX — the second biggest exchange that filed for bankruptcy.

Beyond these collapses, there are also several high-profile cases of hacking-related theft of customer funds on centralized and DeFi platforms. These problems have reinforced the debate about the importance of private keys.

We recently caught up with Georgios Kalmpazidis, co-founder and CEO of Swaps.app, who shared his thoughts on the topic.

Q — What do you think about the current security problems plaguing the blockchain industry?

Talking about blockchains, maybe this is the most transparent, secure and democratic technology and system humanity has ever created. It’s getting increasingly popular over the years, and today besides crypto, it is widely used in many other fields, such as health care, property, smart contract, etc.

Blockchain is a relatively new technology that currently meets several security challenges, but I would like to look at those challenges from two perspectives – blockchain and users. From the blockchain perspective, most vulnerabilities are related to the sybil, 51% and routing attacks, which are common issues, are successfully taken care of by cyber security professionals.

Regarding the user side, the main challenges are phishing attacks and the security of private keys, which are some of the top issues. When we look deeper, the problems here are similar to the ones in traditional financing, and consistently guiding and educating the users is the key to protecting their funds and fighting fraudsters.  It should be one of the top priorities for the companies.

Above all the mentioned factors, there is another major problem, which is the biggest roadblocker for the industry’s organic development. I call it an irresponsible and immature business strategy, which misleads and mistreats the users bringing them enormous losses. Unfortunately, we have several similar cases in the industry that we all can recall.

Q — Do you think the…