Cybercrime Thrives in a Cashless Economy

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The debate surrounding the benefits and disadvantages of a cashless economy gained momentum over the past decade. Proponents of going cashless gained new supporters since the Covid-19 pandemic began – and cybercriminals are rejoicing.

Online orders and contactless payments soared as lockdowns across the globe kept people at home. Cybercrime also reached new levels as hackers began taking advantage of increased online activity and people who are unsavvy about how to protect their information and identities.

As India’s Business Today explains,

“As the e-commerce transaction process entails multiple entities at different stages – such as marketplace, merchants, payment gateways, financial institutes, apart from the consumers – each of them can act as a vulnerability or attack point for malicious actors.”



Here, we take a closer look at the increased risks of criminal activity caused by growing online and electronic transactions.

Cash under attack

But first, what exactly is a cashless economy? A cashless economy or cashless society refers to a financial system that has no banknotes or coins in circulation and where all financial transactions are conducted electronically using banking cards, online transfers, electronic wallets and cryptocurrency.

Banks and financial institutions have been the greatest supporters of a cashless economy as they profit most from transaction fees paid on each electronic payment.

Brett Scott, British author of ‘The Heretic’s Guide to Global Finance: Hacking the Future of Money,’ observes that,

“A degree of ‘moral panic’ had been created by companies like Mastercard, which ran overt campaigns against cash.”

He calls this the ‘demonization’ of cash – a trend that has been exacerbated by Covid-19.

When the pandemic first hit in early 2020, the World Health Organization (WHO) hastily announced that cash could transmit the virus. Numerous studies quickly debunked that theory, and while the WHO retracted its initial statement, people made more purchases using electronic payments – despite the fact that research shows self-checkout touchscreens and PIN pads on credit card machines are more dangerous than cash. As more people, particularly those not accustomed to doing so, began making payments electronically, cybercrime also reached new levels.

The dangers of an online world

Cybercrime refers to a wide range of online criminal activities, including drug and sex trafficking, online harassment and offensive content as well as ones that access and exploit our personal data for criminal use such as identity theft, financial and credit card fraud, account takeover, phishing and malware, synthetic identity frauds and the theft of cryptocurrencies.

In cashless economies, the rise of digital transactions using credit and debit cards, digital wallets and online transfers means that consumers encounter more points of exposure when their personal information is vulnerable – even if they have no clue that they are at risk or under attack.



While credit card fraud and card-not-present hacks are the most common attacks, having your identity stolen is probably the most damaging. Identity theft occurs when personal information is stolen by someone who then uses it to file a tax return, pay for medical services, get a bank loan, etc. – in other words, to commit fraud. Victims spend months or even years trying to prove they did not request a loan or receive particular medical treatment. Their credit scores are destroyed until they can convince authorities that they were not responsible.

Newer, more sophisticated synthetic identity frauds have also gained traction. This method uses a “combination of legitimate, modified and false identity information” obtained from a phishing or data hack to create a new identity that can go undetected for months or years.

These are just a few ways cybercriminals exploit and profit from cashless payments. All cause major headaches and varying financial burdens to consumers, governments and companies, large and small.

Cybercrime on the rise

So, just how bad has cybercrime gotten? With 15.1 billion data records breached in 2019, stolen data has since fueled a major increase in cybercrime. According to a Nilson Report, worldwide losses from card fraud reached $28.65 billion in 2019. These were already record numbers but the Covid-19 pandemic and the surge in cashless transactions has pushed the number of cases and costs even higher.

In a year when people were forced to stay home, and cash became unfairly demonized, online payment fraud was expected to increase by at least 73% in 2020 compared to the previous year. In the first five months of 2020, almost $1.4 billion in cryptocurrency was stolen. Indeed, The World Economic Forum’s Global Risks Report 2020 ranked cyberattacks as the number one global human-caused risk, and predicts that cybercrime will cost the world $11.4 million per minute by the end of 2021.

Even more disconcerting are the new tactics used by cybercriminals to take advantage of a world reeling from a devastating pandemic.

Jürgen Stock, INTERPOL’s secretary general, observed that,

“Cybercriminals are developing and boosting their attacks at an alarming pace, exploiting the fear and uncertainty caused by the unstable social and economic situation created by Covid-19.”

Phishing scams alone increased by 667% in February and March of 2020. Fraudulent messages offering Covid-19 medical treatments and relief packages tricked people into providing passwords and other payment information that cybercriminals used to steal their money. A report from INTERPOL identified over 700 malware attacks, 48,000 malicious domains and 900,000 spam messages within the first four months of 2020 that all mentioned the Covid-19 pandemic.

Anti-cybercrime efforts can’t keep up

Advocates of a cashless economy argue that financial institutions and merchants can protect customers from fraud by implementing appropriate security measures – but hackers and cybercriminals are constantly adapting to new technology and are often one step ahead.

New security features cost companies, governments and consumers exorbitant amounts of money to develop and implement.

As Julie Fergerson, CEO of Merchant Risk Council, explains,

“Fraud is kind of like an arms race. Whatever technology is being implemented, the fraudsters will eventually figure out a workaround, so you have to constantly keep investing. And that’s the cost of business.”



Cash is still in our future

Online banking and contactless payments are not going away, but neither is cash. The New York Times noted that 80% of financial transactions in Europe just before the Covid-19 pandemic were conducted with bills and coins. As this preference is unlikely to change, governments must protect its citizens’ right to pay with cash.

Some will prefer the convenience and ease of electronic payments. Others may be wary about sharing personal data on potentially unsafe online platforms and running the risk of having their credit card information or identities stolen. It is important for people to have the choice.

Judy Graham is a freelance consultant for various European organizations, particularly on digital economy issues.


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Discussing Lightning Network Routing

In this episode of “The Van Wirdum Sjorsnado,” the hosts are joined by Lightning developer Joost Jager to discuss Lightning Network routing.

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In this episode of “The Van Wirdum Sjorsnado,” hosts Aaron van Wirdum and Sjors Provoost are joined by Lightning developer Joost Jager to discuss everything about Lightning Network routing.

What Is Lightning Network Routing?

The Lightning Network — Bitcoin’s Layer 2 protocol for fast and cheap payments — consists of a network of payments channels. Each payment channel exists between two Lightning users. Even if two users don’t have a payment channel between themselves directly, they can pay each other though one or several other Lightning users, who in that case forwards the payment from the payer to the payee.

The challenge is that a payment path across the network must be found, which allows the funds to move from the payer to the payee, and ideally would be the cheapest, fastest and most reliable payment path available.

Jager explains how Lightning nodes currently construct a map of the Lightning Network, and what information about all of the (publicly visible) payment channels is included in that map. Next, he outlines on what basis Lightning nodes calculate the best path over the network to reach the payee, and how the performance of this route factors into future path finding calculations.

Finally, van Wirdum, Provoost and Jager discuss some (potential) optimizations to benefit Lightning Network routing, such as rebalancing schemes and Trampoline Payments.


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JP Morgan Eyes Ethereum Staking as ‘Fast Growing Revenue Opportunity’

In brief

  • Investment banking giant JP Morgan used to be anti-crypto.
  • Now it’s putting out reports about proof of stake and Ethereum, eyeing growth in the staking biz to reach $40 billion by 2025.

JP Morgan, one of the world’s biggest investment banks and previously one that was skeptical of the cryptocurrency industry, has said it believes in the power of staking: the more energy-efficient way of creating and distributing cryptocurrencies. 

The New York City-based bank said in a report that cryptocurrency staking overall makes the “crypto ecosystem more attractive as an asset class.” This is because staking could be a major source of revenue for retail and institutional investors, the bank said.  

But what is staking? And why is a bank like JP Morgan talking about it? 

Staking is a system in which users agree to lock-up money in a network in order to help it validate transactions. These kinds of crypto networks run on something called proof of stake—which is different to proof of work, the system that Bitcoin, the largest cryptocurrency, uses.

Proof of work is used by lots of other cryptocurrency networks—including Ethereum, at the moment—to validate transactions, too. It works by using lots of computers to solve complex puzzles which in turn keep the network running smoothly. 

There’s just one problem: it uses huge amounts of computing power and therefore can be damaging to the environment when that power depends on energy sources such as coal. The carbon footprint of Bitcoin (and other currencies) is a hot topic right now, but the proponents of Bitcoin mining argue that much of the energy used to maintain the network is renewable and that any potential hazards are, in the end, worth it to ensure network security.

But, beyond Bitcoin, a number of other cryptocurrencies are using the proof-of-stake system, which is more environmentally friendly, since it does not require “mining” to create and distribute a given network’s native currency. Ethereum, the second largest cryptocurrency by market cap, is in the process of an upgrade where it will soon use proof of stake instead of proof of work, which will mean the end of Ethereum mining.

And JP Morgan said in its new report, “A Primer on Staking—The Fast Growing Opportunity for Cryptocurrency Intermediaries and Their Clients,” that proof of stake will become more attractive when the Ethereum upgrade is completed—and could grow to be a $40 billion industry by 2025. 

“We estimate that staking is currently a $9 billion business for the crypto economy, will grow to $20 billion following the Ethereum merge, and could get to $40 billion by 2025 should proof of stake grow to the dominant protocol,” the report read. 

The bank added that cryptocurrency intermediaries like Coinbase will make more money if proof of stake becomes popular. Coinbase, the biggest crypto exchange in the U.S., could make up to $500 million in staking revenue by the end of 2025, the report said. 

Coinbase allowed customers to stake their crypto in April. 

Proof of stake crypto assets, which include Polkadot and Cardano, could also go up in value, JP Morgan added. “As staking becomes more commonplace, we think it could drive the interest and market capitalization of proof-of-stake cryptocurrencies higher,” the report noted. 

JP Morgan was previously anti-crypto. Its CEO, Jamie Dimon, famously slated Bitcoin and the crypto industry in 2017, calling the largest crypto “a fraud.”

The American multinational now is more open to the crypto world, and regularly talks about digital assets. It even now banks crypto exchanges Coinbase and Gemini.


The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.


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Axie Infinity (AXS) and Waves make gains as Bitcoin flatlines below $34K

Bitcoin (BTC) price remains relatively unchanged on the 24-hour chart, down 0.56% and trading around $33,200 at the time of writing.

The overall cryptocurrency market traded flat on July 2 with the approach of the Fourth of July holiday weekend in the United States. The lackluster trading volume coincided with a slight decline in the total cryptocurrency market capitalization by $5 billion to its current value of $1.378 trillion. 

Daily cryptocurrency market performance. Source: Coin360

Despite the struggles faced by the market as a whole, data from Cointelegraph Markets Pro has identified bullish developments in Axie Infinity (AXS) and Waves (WAVES) thanks to recent developments related to nonfungible tokens.

Axie Infinity (AXS)

Axie Infinity is a blockchain-based trading and battling game that allows players to collect, breed, raise, battle and trade token-based creatures known as Axies. Since hitting a swing low of $2.85 on June 22 as the price of BTC crashed below $29,000, the price of AXS has surged 125% to an intraday high at $6.40 on July 2 as the demand for Axie’s continues to rise.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for AXS on June 29, prior to the recent price rise.

The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS™ Score (green) vs. AXS price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ Score for AXS first registered in the green beginning June 26 as the price of AXS began to slowly creep higher and finally reached a high of 83 on June 29 as its price began to climb another 45% over the next three days.

At the time of writing, the VORTECS™ Score for AXS had climbed to a new high of 86, indicating that there could still be more upside ahead for the price of Axie Infinity based on the previous price action of the token.

Waves (WAVES)

Waves has also been identified by Cointelegraph Markets Pro as a strong performer after its VORTECS™ Score turned bullish in late June.

VORTECS™ Score (green) vs. WAVES price. Source: Cointelegraph Markets Pro

As seen on the chart above, market conditions for WAVES were favorable during the last month of June with its VORTECS™ Score reaching a high of 83 on June 27, just four hours before its price began to increase by 35% over the next three days from $13.31 to a high of $17.75.

The VORTECS™ Score for WAVES has once again climbed to 83 on July 2, hinting that the bullish case for WAVES may still be intact.

Bitcoin hovers near $33,500

The overall weakness in the altcoin market stems from Bitcoin’s price struggling below $33,400 as many traders appear to have gotten an early start to their holiday weekend.

Related: 44% of investors expect Bitcoin to drop below $30K in 2021: CNBC survey

BTC/USDT 4-hour chart. Source: TradingView

Data from Cointelegraph Markets Pro and TradingView shows that the price of BTC has traded in a tight range between $32,650 and $34,000 on July 2 as traders wait for a major news event or on-chain development to initiate the significant price move for the top cryptocurrency.

The current overall mood in the market is one of uncertainty, as displayed in the following tweet from Filbfilb, an independent market analyst and co-founder of the Decentrader trading suite, who remains “undecided what happens next” and is “watching for blood.”

The overall cryptocurrency market cap now stands at $1.373 trillion and Bitcoin’s dominance rate is 45.5%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.