“Is crypto safe?” We hear that question time and again, right after, “Isn’t it a scam though?” and “But I heard about this guy …”

Some individuals – those who aren’t deterred by damning headlines and well-publicized hacks – are willing to take the risk when the rewards could be so high. But for the majority who have yet to take the plunge, security is at the forefront of their minds, and it’s becoming clearer with every passing report that this is the biggest barrier to mainstream adoption. So, if the power of the blockchain has any hope of reaching the masses, individuals and companies alike must believe that what they’re doing with their money and their clients’ money is safe.

Eye-wateringly large crypto hacks and thefts make great headlines. But the biggest problem that leads to crypto loss is the fact that individuals and companies must protect their own digital assets and the way in which they access them. Of course, this is one of the greatest benefits of cryptocurrency, as it goes hand in hand with decentralization and having full autonomy over your assets – but it’s also the root cause of many issues. Ultimately, this lack of a safety net is one of the key reasons so many are hesitant about entering this world in the first place.

For customers of traditional banks and credit card companies, this isn’t a concern; they trust that it’s the service provider’s job to keep their money, their passwords and their personal identifiable information safe. Sure, this trust isn’t always warranted, but over the many centuries that TradFi has been around, customers have come to expect a level of security offered by the institutions that hold their assets. All the customer has to do is ensure they don’t share their four-digit PIN or reuse their password.

But when it comes to crypto, there’s a fundamental misunderstanding around who is responsible for ensuring the safety of digital assets. The expectation is that exchanges and wallet providers will be able to prevent fraudulent transactions or hacks, or recover lost private keys – but the reality is quite different. And regulators are starting to wake up to the risk this lack of understanding brings to the consumer.

We must address this if we’re ever to bring the power of blockchain into the mainstream. After all, writing down passwords and putting them in a desk drawer is no way to change the world’s financial system.

Investors want to be assured that if they get locked out of their wallets, they can get back in. Businesses want to know if a transaction looks fraudulent, it will be stopped. And regulators want to know that if things go south, consumers will be protected.

We’ve seen a significant uptick in investors and institutions looking for crypto insurance, believing it to be a panacea of security they can control and that will settle their worried minds. In such a fledgling, misunderstood space, it feels like a simple solution to a complex problem: iIf there’s a risk that your asset will be stolen or lost, put insurance in place so you can recover it. And for a very limited few, it’s an option. But crypto insurance – if you can even get it – is expensive and ultimately it does nothing to prevent theft or loss in the first place.

You know the saying “prevention is better than cure”? That’s what we’re talking about here. You wouldn’t leave your front door unlocked because you have home insurance – so why do that with your digital assets?

“Is crypto safe?” We hear that question time and again, right after, “Isn’t it a scam though?” and “But I heard about this guy …”

Some individuals – those who aren’t deterred by damning headlines and well-publicized hacks – are willing to take the risk when the rewards could be so high. But for the majority who have yet to take the plunge, security is at the forefront of their minds, and it’s becoming clearer with every passing report that this is the biggest barrier to mainstream adoption. So, if the power of the blockchain has any hope of reaching the masses, individuals and companies alike must believe that what they’re doing with their money and their clients’ money is safe.

Eye-wateringly large crypto hacks and thefts make great headlines. But the biggest problem that leads to crypto loss is the fact that individuals and companies must protect their own digital assets and the way in which they access them. Of course, this is one of the greatest benefits of cryptocurrency, as it goes hand in hand with decentralization and having full autonomy over your assets – but it’s also the root cause of many issues. Ultimately, this lack of a safety net is one of the key reasons so many are hesitant about entering this world in the first place.

For customers of traditional banks and credit card companies, this isn’t a concern; they trust that it’s the service provider’s job to keep their money, their passwords and their personal identifiable information safe. Sure, this trust isn’t always warranted, but over the many centuries that TradFi has been around, customers have come to expect a level of security offered by the institutions that hold their assets. All the customer has to do is ensure they don’t share their four-digit PIN or reuse their password.

But when it comes to crypto, there’s a fundamental misunderstanding around who is responsible for ensuring the safety of digital assets. The expectation is that exchanges and wallet providers will be able to prevent fraudulent transactions or hacks, or recover lost private keys – but the reality is quite different. And regulators are starting to wake up to the risk this lack of understanding brings to the consumer.

We must address this if we’re ever to bring the power of blockchain into the mainstream. After all, writing down passwords and putting them in a desk drawer is no way to change the world’s financial system.

Investors want to be assured that if they get locked out of their wallets, they can get back in. Businesses want to know if a transaction looks fraudulent, it will be stopped. And regulators want to know that if things go south, consumers will be protected.

We’ve seen a significant uptick in investors and institutions looking for crypto insurance, believing it to be a panacea of security they can control and that will settle their worried minds. In such a fledgling, misunderstood space, it feels like a simple solution to a complex problem: iIf there’s a risk that your asset will be stolen or lost, put insurance in place so you can recover it. And for a very limited few, it’s an option. But crypto insurance – if you can even get it – is expensive and ultimately it does nothing to prevent theft or loss in the first place.

You know the saying “prevention is better than cure”? That’s what we’re talking about here. You wouldn’t leave your front door unlocked because you have home insurance – so why do that with your digital assets?