In a report from South Korea’s ETNews, security-focused researcher Kim In-soon has admitted that there is a currently a high demand for bitcoin hardware wallets in the country due to users avoiding local cryptocurrency exchanges storing their funds.
With only a handful of exchanges in the US and Europe combined which have yet been victims of major hacks, and even the biggest largest cryptocurrency trading platform in country (Bithumb) being subjected in the past to several data breaches and hacks, it is no surprise that the citizens of South Korea that are actively participating in crypto activities are opting to use hardware wallets.
Centralized cryptocurrency exchanges and wallet platforms are prone to hacking attacks and other forms of cybercrimes due to their dependence on a single point of failure. Because these cryptocurrency exchanges are managed by a group of administrators or a company, their servers, databases and infrastractures are all managed centrally.
This centralization of the aforementioned components is like a window of opportunity for hackers to break into the system and steal user information, highly-sensitive financial data and maybe even reallocate user funds.
Due to the flaws and weak points of centralized wallets and cryptocurrency exchanges, many users in South Korea have started to prefer hardware wallets and cold wallets over centralized hot wallets thus the recent increase in its demand.
Recognizing this demand, three major cryptocurrency hardware wallets targeting the local market have launched (Penta Cryptowallet, Keypair, and TouchxWallet). Even a France-based cryptocurrency hardware wallet manufacturer has decided to enter the South Korean market.
In an ever-changing and rapidly growing market of cryptocurrency, the shift in fads from user-friendly centralized wallets to a more secure hardware wallet can be considered a good indicator because it is a prime example of the users’ interest in developing security awareness.