Most cases of cryptocurrency theft arise from the mishandling of private keys, sometimes through the fault of an individual revealing their private key to another party, or due to a breach in the network leading to large-scale theft. The public key must be known by the sender. Public keys are the ‘address’ to which funds are sent. These keys are what allow individuals to make transactions and spend their cryptocurrency. Private keys are used to unlock digital credits and are stored in a digital wallet. Upon this confirmation, the transaction will be recorded on the ledger.Įvery piece of cryptocurrency has a private key, which is intended to protect a user from theft and unauthorised access to funds. This is where the unique ‘decentralised’ aspect of blockchain technology stems from, as individuals who engage in a transaction will need confirmation from hundreds of other computers as to whether the transaction is legitimate. Blockchain is a digital registry that records all transactions in the form of a ledger, which is updated, shared, stored and accessible on computers all over the world. All cryptocurrencies rely on varying forms of blockchain technology. In this article we will give a brief background of cryptocurrency, explore Australian cryptocurrency law, look at the inherent vulnerabilities of cryptocurrency, and explain why expert opinions will be required in future litigation cases.Ĭryptocurrencies are a form of virtual currency which act as an alternative to fiat currency. For this reason, the insights of technology, finance and law experts are needed to settle crucial matters and provide a fair assessment for all parties involved. Historically, most litigation for cryptocurrency have involved breach of contract, insolvency, loss, theft, or fraud. The nature of crimes and unfair dealings that relate to cryptocurrencies also differ and will require the opinions of appropriate specialists. Since it is a virtual currency, the laws that govern it differ from those which govern standard (or ‘fiat’) currency. Cryptocurrency is an increasingly popular alternative currency.
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