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Crypto companies beware-the risks of human error are too great to ignore

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Source: Frontlines

If there are three things we know about the human error, it’s that it can be costly, dangerous, and ultimately inevitable.

No matter how competent or intelligent a person is, they are bound to make mistakes, and a single error can lead to substantial losses and devastating repercussions to any company that does not take proactive measures.

This is especially true when it comes to managing or accounting for crypto. Although solutions exist to automate manual tasks and streamline finance workflows, many crypto companies continue to depend on a human workforce, leaving them susceptible, because no human is infallible.

Statistics show that overdependence on human skill is a liability not only in the world of crypto but in any company across many vastly different industries.

To demonstrate the severity of the human error and how it can impact your company, let’s take a look at some of the most telling statistics:

27.5 percent of companies reported that incorrect data was manually entered into their enterprise systems.

For businesses,  incorrect or inconsistent data entry can lead to major issues when filing taxes or completing an audit. For crypto accountants, bookkeeping errors can lead to miscalculations of the business’s financial health and can result in inaccurate projections for reports, growth and total revenues.

Any professional will stress the importance of accuracy and verification for manual data entry. It’s simple, mistakes cost money, reputation and even trust from their customers.

Human error causes roughly 90 percent of cyber attacks.

Most crypto CFOs and CEOs are keenly aware of the overall need for increased cybersecurity. But they mistakenly approach the problem from the outside in, rather than the other way around. They believe the biggest threats are external and malicious, but nearly 90 percent of cyber attacks stem from human error.

This can even occur without an employee even realizing it, and many employees have exposed themselves and their companies by responding to phishing emails or using weak passwords.

The stakes are incredibly high in the world of cryptocurrency. One compromised employee account can result in potential financial losses for a company, or endanger the privacy of users or customers. It’s more critical than ever for crypto companies to mitigate risks originating from human error, and employ preventative solutions.

Instead of solely focusing on hackers [who rank fourth among all threat actors, according to Netwrix], c-suite leaders should be focused on investigating tools such as Blox.io, a crypto accounting and bookkeeping platform that provides automated and intelligent technical solutions to circumvent the issue altogether.

Between 70 and 96 percent of workplace mistakes are caused by human error.

Humans are to blame for the vast majority of workplace mistakes. Crypto leaders should absorb this point in particular because people tend to trust human intuition over computer logic. But,over-reliance on employee accuracy could lead to serious problems for any company with too much trust, and not enough checks and balances in place.

On the crypto accounting side,  employees may accidentally forget critical workflow steps, incorrectly calculate cost basis or mislabel transactions, or create organizational chaos across accounts, exchanges, and wallets. These acts aren’t intentional, but the consequences are undeniably detrimental to a company’s success, reputation, and bottom line.

22 percent of unplanned data center outages are linked to human error.

Data centers are one of the most vital components to almost every industry in existence. They host our data, private user information, websites, cloud services, and essentially everything that takes place online is flowing through data centers across the globe. To exemplify,  Facebook recently faced a social media backlash after its servers went down for hours, with many businesses suffering the loss of service and revenue.

When considering that 22 percent of unplanned data center outages are caused by human error, this should raise legitimate concerns over how data is stored and protected. Moreover, if an interruption in server uptime causes a crypto exchange to go down, the repercussions can mean a loss of millions and major backlash from users. The potential for disaster is real, and this is why businesses must be deliberate and proactive.

To conclude, humans are the driving force behind innovation, and employees are essential for critical thinking on high-level decisions and strategy. However, when introducing automation and technology, businesses can limit their exposure to the risks caused by a human error while still leveraging the experience and intuition of the human workforce.

For any company, crypto or traditional, the fear of human error is real and is unlikely to simply vanish. The only means to protect against human error is to use smarter and more innovative technology to assist and empower your human workforce. By integrating technical solutions, businesses can improve productivity, boost performance and protect against costly human mistakes.

Adam Efrima, Co-founder, Blox:

Adam is a blockchain entrepreneur and active member in the Chinese Financial and Fintech industry, living in Shanghai for over 8 years. Adam previously served in leading roles at the Chinese financial conglomerate, CITIC, and eventually founded the Shanghai office for eToro. After being deeply involved in the blockchain space for several years, Adam went on to co-found Blox.io, where he leads the Blox China headquarters, with plans to expand across APAC.



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1 Comment

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  1. Avatar

    Michael

    March 23, 2019 at 12:57 AM

    Wow! Never realised human error could cause so much damage…

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Guest Post

Industry player Fumgo gives 5 tips on how to trade cryptocurrencies

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Industry player Fumgo gives 5 tips on how to trade cryptocurrencies
Source: Fumgo

Look, you could have bought one bitcoin in April for $4,000 and sold it today for $8,000.

It sounds like an easy way to earn money, right? The crypto trading, however, isn’t that simple. In fact, the always-changing price, high stakes, and online scams make it also dangerous for those who know little about it.

So when you take risks for rich rewards, make sure to follow these tips:

1. Use reputable exchanges

To trade cryptocurrencies, you go to exchanges, internet platforms that help buyers and sellers meet.

But high market demand brought in a number of phony exchanges. You must keep an eye out for them and make sure you use only reputable ones like Bittrex, Huobi Global, OKEx, HitBTC, or Binance.

There are also trading terminals like Fumgo. The terminals let you trade across multiple exchanges — including the ones mentioned above — from one interface. In fact, it’s even safer to use them, because they offer two-factor authentication when you log in, unlike exchangers.

2. Learn from professionals

Crypto trading is a job. You need to monitor the price movements and make decisions. This is hard to do without knowledge about the market.

Find real traders and learn from them. Some of them post videos on YouTube.com, others publish articles. It takes time, but it’s well worth it.

At this stage, beware of scammers who have never traded cryptocurrencies but promise to teach the craft. The internet is full of free tips, but these “experts” sell them as professional knowledge.

There’s a way to shortcut the learning curve: the Fumgo terminal has a feature that allows mirroring the traders. If you switch it on, it will make your account copy the actions of chosen professionals automatically. The system verifies them — only true pros allowed.

3. Practice with small sums of money

Seen enough and feel confident? Then it’s time to practice. But don’t rush, start with small investments.

The cryptocurrencies rates change unpredictably, so invest the amount of money that you wouldn’t regret losing. Practice as much as possible this way and when you manage to earn regularly, raise the stakes.

4. Stick with one strategy

Every trader has their own style. Copy one and stick with it for some time, see how it goes. If you change your strategy too frequently, you won’t be able to see the result.

Three tricks are universal, however: 1) make a limited amount of transactions per day to approach trading energized; 2) pay attention to Bitcoin, its price influences other currencies; 3) keep statistics on your transactions to understand what strategies work best.

For the latter, there’s a shortcut, too. The Fumgo terminal tracks your stats automatically and shows the history of all the transactions.

5. Trade different currencies

Bitcoin isn’t the only cryptocurrency worth attention.

The price for Monero, for example, has been changing constantly from $10 in 2017 to $100 today. At some point, it even cost $500. The same with Dash and Ethereum.

Pro traders usually devote only 5–30 percent of their capital to one cryptocurrency. Follow suit.

The easiest way to keep track of your cryptocurrencies is via terminals: in one interface, you can compare the rates of your cryptocurrencies across various exchanges and sell each where it’s most profitable. Terminals usually have subscription models: Fumgo, for example, costs $20 a month but offers a trial week and two free months for subscribers.

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