A major report by a leading name in the technology sector has revealed that only 1 in every 10 people are aware of how cryptocurrencies actually operate in practice.
The report, from the cybersecurity organisation Kaspersky, interviewed over 13,000 people from more than 20 countries in order to reach its findings.
It also found that 15% of respondents said they had fallen victim to crypto fraud, while almost a fifth had seen crypto exchanges get hacked.
In a sign that cryptocurrencies have not yet developed the legitimacy of fiat currencies, more than a third of survey respondents said that crypto was a “fad”.
Over 80% said they had not bought crypto at any stage in the past.
As well as these indications that cryptocurrency fraud, and the conditions which create and support it, is common, the report also found that many people were simply far removed from crypto altogether – and showed no signs of entering the field.
The report, which was entitled “Uncharted Territory: Why Consumers are Still Wary about Adopting Cryptocurrency”, also learned that just 14% of respondents who were not at the moment users of crypto wanted to become users in the future.
Drilling down into the reasons behind these attitudes, the report discovered that one of the most common reasons why those who formerly did use crypto but have now abandoned it is that they were concerned by its volatility.
Crypto fraud, however, came relatively low down on the list. Hacking caused 19% of people to abandon the asset class, while other security problems and vulnerabilities caused 15% to drop cryptocurrencies.
More common reasons than crypto fraud included a perception that crypto is no longer profitable– a sense that was shared by 23% of people.
According to those behind the report, the lack of trust has proven to be a key barrier.
Vitaly Mzokov, Head of Commercialization at Kaspersky, said that the “vulnerable nature of the technology” was a key concern.
“It is clear that mainstream adoption and growth of cryptocurrency is being held back due to the vulnerable nature of the technology”, he argued.
“While there is a high appetite to use it, giving your hard-earned cash to something you don’t fully understand, or trust, is a hurdle. With the safety of investments being of paramount importance to consumers, it is vital that they take their own steps to safeguard it.”
Like with any cyberthreat, there is no substitute for vigilance – if something looks too good to be true, then it probably is. If you want to trade crypto-assets on any exchange, pay attention to the safety of your account’s credentials. If your goal is long-term investment or to use cryptocurrencies for payments, then store it in a safe environment and use multiple wallets or distribute between both software and hardware wallets.
There is a role for providers to play in this too, he said.
“We also encourage crypto businesses to organize themselves effectively to show they are able to protect their customers’ investments”, he added.