Exploiting the Same Price Level more than Once and Making the Most of Limited Opportunities

Best Binary Options Brokers 2020:
  • BINARIUM
    BINARIUM

    Best Binary Broker 2020!
    Perfect for Beginners!
    Free Trading Education! Free Demo Acc!
    Get Your Sign-up Bonus Now:

  • BINOMO
    BINOMO

    Trustful broker.

Contents

Exploiting the Same Price Level more than Once and Making the Most of Limited Opportunities

Monday was one of those trading days where there’s a decent amount of movement, yet not much going in the way of actual trade set-ups. Pivot points weren’t a factor and it took a price level to manifest on its own from the price data to actually get something worth trading.

On the 6:40(AM EST) candle, price closed out around 1.3272. The next candle was bearish, while 1.3272 was rejected again on the 6:50 candle. So here we already had the basic footing of a resistance level in the market. A common question that traders have is what constitutes a “resistance level,” for example? Basically it can be as simple as a green/up candle followed by a red/down candle. Mainly, I’m just looking for how price acts around these levels – pivot points, high of day, low of day, any type of support or resistance created from previous price history – and, of course, how price acts on its own.

I addressed this matter in some detail in these posts:

When the 6:55 candle was bearish, I felt I had what was necessary to support a put option set-up at 1.3272, expecting that the resistance level would keep price below. The trend was also slightly down.

Once price hit 1.3272 on the 7:00AM candle, I entered a put option. The trade received a nice boost down on the 7:05, and made challenges up to my entry point on the 7:10 and 7:15 candles, but the level held and ultimately expired about one pip in-the-money.

Given the set-up was still valid to me, I decided to re-enter the same trade, a put option at 1.3272, on the 7:20 candle. The 7:25 fell about five pips in my favor, before settling as about a four-pip winner.

In today’s trading, despite a grim early outlook, it came down to simply finding a good spot to trade. And since the situation was favorable, I was able to make the most of it and take two pretty good winning trades going with the trend.

As you can see below in the daily chart, the EUR/USD has been in a steep downtrend for the month of August, so with all the daily downtrends that have been frequent as of late, put options have tended to not be a bad idea.

The exchange rate is currently below 1.3200, which is a low that hasn’t been seen since the beginning of September 2020, about a year ago.

100 Top Money-Saving Tips for 2020

There are a lot of ways to waste money, but fortunately, there are also a lot of ways to save. From lowering your utility costs to coupon sites, this roundup of 100 money-saving, reward-earning, and frugal-living tips will help you stay ahead of the game financially. Keep it handy by bookmarking it in your favorite browser and on your smartphone.

Cut the Cord

Consumers can save by joining the cord-cutting revolution and opting for a streaming stick from Roku, Google, or Amazon, or a set-top box such as Apple TV. Without a cable subscription, monthly entertainment costs can dip to less than $10 a month, and there is still plenty to watch.

Dress up for Less

Want the outfit worn by a celebrity? It may be possible to find a similar look for a lot less at a low-price apparel chain such as Forever 21 — or rent the very same look at a site such as Rent the Runway.

Best Binary Options Brokers 2020:
  • BINARIUM
    BINARIUM

    Best Binary Broker 2020!
    Perfect for Beginners!
    Free Trading Education! Free Demo Acc!
    Get Your Sign-up Bonus Now:

  • BINOMO
    BINOMO

    Trustful broker.

Insist on No-Fee Banking

Switch to a bank with fee-free checking and ATM use or fee reimbursement — often available from smaller local banks or credit unions. These institutions also typically offer checking accounts with no minimums and lower fees than large banks. Explore online services from Charles Schwab, Ally Bank, or USAA Bank (for members and relatives of military members and veterans).

Spend Less to See Movies

Save money on movie outings by buying tickets in bulk at warehouse clubs or straight from theater chains, attending matinees, going on discount days, and avoiding the overpriced snack bar.

Dine Where Kids Eat Free

At least five days of the week (generally not Friday and Saturday) there’s a restaurant chain that lets kids eat for free after the purchase of an adult entree.

Drop Unused Memberships

Check monthly bills and think twice about memberships that aren’t used often. Whether it’s a subscription box with products that aren’t often to your liking or an infrequently visited gym, if the service isn’t providing value, stop paying for it.

Photo credit: Maridav/shutterstock

Find Free Fun

Cut your entertainment budget: Spend a day outdoors hiking along one of the many beautiful trails this country has to offer. If it’s cold, check out bookstores so cool that visiting is worth it even without a purchase.

Pay off Credit Cards

It’s a myth that keeping a small balance on a credit card improves credit scores. On the contrary: Paying off balances can help cardholders boost their scores — and save money by avoiding interest payments.

Take Advantage of Libraries

Libraries do more than offer free books; they rent movies and ebooks inexpensively and host classes of all sorts, among other services. Libraries are also accommodating workspaces — they’re quiet and there’s no need to buy coffee or a snack every few hours.

Seek out Offbeat Attractions

Looking for a cheap or free vacation thrill? There’s something unexpected or off the beaten path in every state, from an inn shaped like a giant beagle to the famed Cadillac Ranch in Texas.

Ask About Senior Discounts

The age for senior discounts may be as young as 50 at restaurants, grocery stores, and clothing retailers. With deals ranging from 5 percent to 50 percent off, make sure to ask.

Don’t Write off Boutique Hotels

Travelers looking for an alternative to a generic room in a large hotel chain property can opt for an inexpensive boutique hotel. There are options across the country worth considering, and rates can be as low as $50 a night.

Book Slightly Outside of Town

Hotels are often cheaper farther from the city center or from major attractions. This isn’t always true at holiday times, though. That’s when business travel is at a lull, and rates may fall in a city’s financial district. Also, be sure to keep an eye peeled for hotel freebies, like snacks and fitness classes.

Avoid Baggage Fees

Many airlines charge for checked bags, but there are ways to fit everything into a carry-on and otherwise eliminate or reduce airline baggage fees. Watch out for budget airlines Allegiant, Frontier, and Spirit, which collect fees even for carry-ons. A new class of fare on United also limits free baggage to one personal item.

Try a Home Juicer

Instead of buying bottled juices or doing a pricey, prepackaged cleanse, use a home juicer. The time commitment and cleanup are not for everyone, so start with a cheap juicer and upgrade if juicing turns into an ongoing thing.

Learn Price Code Secrets

Many retailers use price codes (for example, a price that ends in .97) on tags to indicate whether an item is a final markdown or may be discounted further.

Photo credit: Anan Kaewkhammul/shutterstock

Negotiate

Negotiating makes sense more often than you might expect. With market information in hand, go straight to the manager at a rental car agency or hotel and try to wrangle a deal. No luck lowering the price? Try getting more value with an upgrade or fee waiver.

Install a Programmable Thermostat

Smart thermostats can be real money savers — they learn residents’ preferences and can be controlled from afar — but even a cheap programmable thermostat set at a reasonable temperature can save $180 a year on average, according to the federal government’s Energy Star program.

Sell Clothes

Earn extra cash by selling unwanted clothing on websites such as Poshmark, Vinted, Carousell, ThredUp, or The RealReal.

Price Match

Some major retailers, including Walmart, Target, Staples, Best Buy, Office Depot, and Toys R Us, now price match Amazon. There are many exclusions to watch out for, but checking prices with a smartphone before making an in-store impulse buy can yield savings.

Rent and Swap Toys

Don’t waste money on toys that children will cast aside after a few months. Instead, consider toy swaps with other parents in your neighborhood.

Don’t Go Overboard for Savings

Being too cheap may not be financially wise. Don’t blindly choose the least expensive item when it’s low-quality, for instance. And make sure extreme couponing or a long drive to find the cheapest gas isn’t wasting more time than it’s worth.

Buy Generic Food and Drugs

Doctors tend to buy generic versions of common medications, and chefs buy store-brand baking supplies such as brown sugar. Private labels and generics usually cost less for the same quality.

Shop for a Diamond Online

Looking for a diamond ring for a holiday engagement? Get a good price by shopping online and knowing the five C’s: clarity, color, cut, carat, and certification. Don’t compromise on cut, which makes a diamond sparkle, but a low clarity or color grade is harder to notice and can make a large stone more affordable. Also consider alternative synthetic diamonds or alternative gemstones.

Photo credit: PEPPERSMINT/shutterstock

Use Veterans’ Discounts

Veterans can take advantage of a slew of discounts and benefits year-round. Lowe’s, for example, offers 10 percent off to active and retired military and those receiving Veterans Affairs benefits.

Seek Alternative Phone Service

Escape the contract and switch to an ultra-cheap phone provider such as FreedomPop or Republic Wireless. They use the same towers as some of the big telecom companies but charge consumers just a fraction of the price.

Test out of College Classes

Yes, it’s possible to earn a bachelor’s degree for less by testing out of required classes at an accredited college. This path requires a lot of self-discipline but can save tens of thousands of dollars.

Do Disney on a Budget

Regular tickets to Disney World are more than $100 for ages 10 and up, but there are ways to save on a Disney trip. One of the best strategies: Bring food, drinks, and even Disney memorabilia bought somewhere besides the overpriced gift shops (tell the kids a favorite character stopped by the hotel to leave them a souvenir). Disney World now allows outside food, and Disney cruises permit up to two bottles of wine or six beers in a carry-on (although the dining room corkage fee is $25).

Monitor Credit

Detect fraud early by monitoring credit reports and checking credit scores for free using a site such as Credit Sesame or Bankrate. Some credit cards now come with a free credit score.

Get Cash Back

Cash-back shopping sites such as Rakuten and Mr. Rebates let consumers earn a percentage of their money back when shopping online. Many rewards credit cards offer a similar perk for online and offline purchases.

Maintain Low Credit Card Balances

For a high credit score, don’t spend a large part of each card’s available credit limit. The utilization rate — the percentage of a credit limit that’s being used — is an important credit-scoring factor, and lower is better in the eyes of credit scoring agencies.

Don’t Let Credit Card Debt Linger

Consumers who have good credit scores but have trouble paying off credit card debt can move the debt to a card that charges zero interest on transferred balances during a promotional period. Some, but not all, such cards charge a one-time fee equal to a percentage of the amount transferred. Another option: Take out a personal loan with a lower interest rate than the credit cards and use it to pay down the debt.

Find Promo Codes

Netting a discount can be as easy as typing the retailer’s name and “coupon codes” into a search engine. Consumers can also check sites such as RetailMeNot, DealNews, and Brad’s Deals for coupon codes before checking out online.

Go Gift Card Shopping

Gift Card Granny shows where to buy gift cards online for less than face value — and who says a gift card has to be a gift? Shop at a discount by paying with gift cards at big-name retailers.

Track Price Drops

Savings need not stop after clicking “buy.” Several price-tracking services alert shoppers to after-the-fact price drops so shoppers can ask for a refund of the difference — or get one automatically (minus a cut for the service). Paribus and Rakuten monitor select retailers, including Amazon, through users’ email accounts. Several credit card issuers offer a similar service for free.

Invest in Energy-Efficient Upgrades

Upgrade a home and reduce utility costs with energy-efficient light bulbs and appliances. The initial investment will pay for itself over time and the planet will benefit. It’s one of many ways to reduce utility costs during the winter.

Steer Clear of Hotel Minibars

It’s not as simple as refraining from eating or drinking anything. Some hotel minibars have a built-in sensor that may be triggered by merely moving items. Look over the bill before checking out to make sure there aren’t any accidental charges.

Photo credit: Vereshchagin Dmitry/shutterstock

Reject Unnecessary Purchases

Avoid buying things that probably will not be used more than once, such as formalwear (rent instead), specialty kitchen appliances (which lose their novelty quickly), and power tools (rent from home improvement stores or borrow from local sources).

Put Credit Card Perks to Work

Many credit cards offer extended warranties, full refunds if items are damaged or stolen up to 90 days after purchase, zero liability for fraudulent charges, and rewards programs that earn the cardholder money back on every purchase. Look at what’s included before buying additional coverage.

Be a Cheap Date

Looking for inexpensive date ideas? Instead of dinner and a movie, try wine tasting, volunteering, going to an arcade, or checking out a local tourist attraction that’s often overlooked by residents.

Don’t Rent a Modem or Router

Buy a wireless router or modem rather than renting one from an internet service provider. The purchase often pays for itself in less than a year.

Escape Foreign Transaction Fees

Get a credit card that does not charge extra for foreign transactions. This can come in handy while traveling or when making purchases in a foreign currency while at home.

Make Razors Last

Save money on razors by drying the blades after each use and storing them in a dry space. This simple step can prolong the life of a razor blade by months. For more savings, consider switching to a service that delivers inexpensive blades.

Buy in Bulk for School Lunches

Save on school lunches by buying ingredients in bulk and packing in reusable containers, instead of purchasing single-serving packages.

Enjoy Free Samples

Influenster and BzzAgent send free samples, and sometimes free full-size products, to consumers who write short reviews or tell friends about the products.

Scout Out Free Makeup

Consumers looking to score free samples of face creams, toners, mascara, and other everyday cosmetics and essentials should check Nordstrom, Belk, and Sephora for classes and events. Beauty magazines often host giveaways for online readers.

Photo credit: wdstock/istockphoto

Adopt the Right Pet

Considering a new pet? Experts say purebred cats and dogs are most prone to illness — and the accompanying vet bills. In general, the least expensive animals to care for are small, female mixed breeds that have been spayed.

Clean With Microfiber Cloths

Microfiber cleaning cloths generally cost more than standard cotton towels, but even the priciest options pay for themselves over time when factoring in durability and savings on cleaning products.

Have a Taco (or Two)

No matter the day of the week, tacos are a delicious and inexpensive food. There are iconic taco shops (or trucks) across the country that are worth checking out.

Save With Apps

Use mobile apps to help save money while shopping for groceries, clothing, and everything else. Try RetailMeNot, Ibotta, Checkout 51, Grocery Smarts, SmartSource, and the Coupons app.

Make Clothes Last

To prolong the life of clothing, wash clothes in cold water, don’t use wire hangers, set the dryer on low, or hang-dry washables.

Don’t Pay Full Price for Conferences

Small-business owners looking to attend conferences can save money or even go for free by volunteering or speaking. Book early and split the cost of transportation or accommodations with other attendees. If the conference price is still out of reach, just go to the after-parties and networking events — often the most valuable parts.

Unplug

Unplugging DVR cable boxes, computers, and other appliances when they’re not in use could knock $200 a year off the electric bill, according to the National Renewable Energy Laboratory, but ending “vampire drain” is only one of many ways to save on energy costs.

Photo credit: Denis Dryashkin/shutterstock

Keep the Wedding Simple

Large floral centerpieces, paying for an open bar, and extravagant extras such as an ice sculpture can add up quickly. Consider a simple wedding and put the savings toward a goal such as buying a home or paying down debts.

Book Travel Directly

Booking directly with travel providers can yield savings and extra perks, such as free Wi-Fi, fewer hidden fees, and more flexibility.

Some Things are Worth a Little More

Don’t go rock-bottom-cheap on these household items: skillets, knives, storage containers, furniture, and vacuums. Stepping up a bit in price is worthwhile to net goods that will last and save money in the long run.

Take Volunteer Vacations

For a way to see the world and also give back, consider a volunteer vacation. The experience can be personally rewarding and much less expensive than a resort.

Shop at Stores With Generous Return Policies

Take the stress out of shopping and guarantee a purchase will be appreciated by going to stores with good, consumer-friendly return policies. Nordstrom is a longtime favorite, and there are several other stores with similar approaches, including Costco.

Take Alternative Transportation

Electric bikes and scooters offer inexpensive and relatively sweat-free alternatives to a car for consumers eager to cut transportation costs.

Send Inexpensive Flowers

Chrysanthemums, carnations, and alstroemerias (Peruvian lilies) cost less than roses and last longer. No matter the type of flowers, call a local florist near the recipient instead of ordering online. The florist may offer savings or prepare a better bouquet for the same price.

Reject Weight-Loss Gimmicks

Some weight-loss methods are too good to be true. Avoid paying for creams, seven-minute workouts, shakes, pills, and fad diets that do not address the needs of the body as a whole. Choose a plan that emphasizes healthy eating and exercise over a quick fix. Instilled habits are more valuable in the long run.

Try Name-Your-Price Shopping

Priceline, Hotwire, and other travel sites aren’t the only ones that let consumers name the price they want to pay. Greentoe has a similar setup for photography equipment, home theater items, appliances, and more.

Buy Secondhand

Garage sales, thrift stores, and flea markets are brimming with gently used items that may be your next big treasure. Books, sporting goods, and kids’ clothes can be had at rock-bottom prices.

Photo credit: Matej Kastelic/shutterstock

Refinance Private Student Loans

Borrowers whose financial situation has improved since graduation may want to look into refinancing their private student loans to potentially lower interest rates. Lenders look beyond credit scores to the borrower’s income, job, education level, degree, and other financial obligations.

Re-Evaluate Federal Student Loans

Refinancing federal student loans can also lead to lower interest rates, which can save borrowers money. Be aware, though: After refinancing with a private lender, borrowers are not eligible for federal payment plans based on income or forgiveness programs.

Lower Auto Insurance Costs

There are many ways to get discounts on auto insurance policies: Take a defensive driving class, install an anti-theft device, or use the same company for several types of insurance, for instance.

Get Teen Discounts on Auto Insurance

Young drivers often must pay more for auto insurance, but some providers offer discounts to teens who maintain good grades or take driving courses or online classes.

Buy Renters Insurance

Renters may benefit from an insurance policy even if they don’t have many possessions. Renters insurance could cover theft of personal property even if it occurs outside the home, and liability protection in the event someone is injured and sues. Installing smoke detectors, buying a fire extinguisher, or paying premiums for a full year all at once usually generates a discount.

Ask About Student Discounts

Students are often on a shoestring budget, but there are plenty of savings opportunities. Some clothing stores, including Madewell, Asos, and Topshop, offer a 10 percent to 15 percent student discount. Restaurants, grocery stores, movie theaters, gyms, and technology companies also offer discounts for students.

Quit Smoking for Insurance Deals

A sure way to lower health insurance premiums is to quit smoking. Renters and homeowners’ policies also often cost less for non-smokers.

Pay Higher Deductibles

To decrease premiums on your insurance, raise the deductible (the amount the policyholder must pay before the insurance company starts to cover costs).

Think Twice Before Filing Insurance Claims

When the cost to replace possessions or fix a vehicle is less than an insurance deductible, it may make sense not to make a claim. The policyholder has to pay for the damages out-of-pocket either way and reporting the incident may result in higher premiums.

Photo credit: Tidarat Tiemjai/shutterstock

Take Care With a Car

Most people know a new car’s value drops as soon as it’s driven off the lot. Help maintain the value by taking the car in for regular checkups, waxing the exterior, and avoiding eating, drinking, or smoking inside.

Use a Standing Desk for Less

Standing desks can encourage workers to be less sedentary and offer a nice change from sitting in front of a computer all day. Retail prices can reach into the thousands, but there are cheaper alternatives, including a wall-mounted shelf or stacking books or boxes to raise the height of a laptop or monitor. Keep feet relaxed by standing on a folded yoga mat or anti-fatigue mat.

Adapt to Age Well

Some basic lifestyle changes can help maintain or improve health as you age. Work in 30 minutes of physical activity a day, get plenty of sleep, and try to minimize sugar intake.

Consider Refinancing Your Mortgage

Refinancing a mortgage could lead to significant savings. Shop around to get quotes from different lenders and consider different loan terms.

Get Last-Minute Tax Savings

Get a tax deduction for the current year by contributing to an Individual Retirement Arrangement right up to the tax-filing deadline in the coming year. The IRA contribution limit for 2020 is $6,000 ($7,000 for taxpayers 50 and older).

Touch Up a Bathroom Instead Of Tearing It Out

Save on a DIY bathroom remodel by keeping the basic layout the same and making other improvements: installing a new vanity countertop, painting the walls, putting up a new mirror, and regrouting the floor and tile.

Deduct Mileage

The IRS has yet to announce it, but small-business owners who record the miles they drive for work can most likely take a deduction of 58 cents a mile for 2020. If the rate stays the same from last year, taxpayers who don’t own a business can deduct 14 cents a mile driven for charitable purposes, or to and from a volunteer event.

Track Prices

Sites such as CamelCamelCamel and PriceSpider monitor the price of goods at stores such as Amazon, Best Buy, and Newegg so shoppers can pounce when the price drops.

Be Careful Hiring a Contractor

Before hiring a contractor, figure out if someone with specialized training is needed and get recommendations from friends and family. Set a budget and ask contractors for an itemized task and quote list. To be safe, budget for cost overruns up to 20 percent of the initial quote.

Improve Curb Appeal for Less

Preparing a home for potential buyers or visiting relatives doesn’t have to involve expensive improvements: Clearing the driveway and walkways, cleaning the windows to let in natural light, and decorating the front with all-season plants may be the most important steps.

Photo credit: ljubaphoto/istockphoto

Compare Moving Expenses

The cost of shipping may be less than renting a truck for a long-haul move for people without large furniture. Before packing up and moving, compare quotes from local moving companies against shipping costs.

Practice Preventive Care

Emergency room visits can cost thousands — or tens of thousands of dollars. Taking preventative health measures such as not smoking, getting regular checkups or screenings, and practicing safe sex could reduce the chances of running into health problems.

Ignore Pricey Workout Clothes

Lululemon and Athleta may be in vogue, but frugal fitness buffs can turn to plenty of places for deals on workout clothes. Check out websites such as The Clymb, ClothingUnder10.com, and Steep and Cheap, or inexpensive retailers such as Old Navy.

Try Some Simple Kitchen Hacks

A few simple kitchen hacks can save money and time. To cite just a couple: Wrap banana stems in plastic to keep them fresh longer (keep plastic wrap chilled to make it easier to separate and tear) and put marshmallows in brown sugar to keep it soft.

Be a Smart Souvenir Shopper

When taking a trip or traveling to a new state, look for representative souvenirs that are small, lightweight, and inexpensive. Macadamia nuts or Kona coffee from Hawaii, saltwater taffy from the New Jersey shore, or an album from one of Nashville’s well-known record shops are popular examples.

Get Hotel Rewards

Even infrequent travelers can save money by enrolling in hotel loyalty programs. Basic membership comes with free Wi-Fi, late checkout, and complimentary newspapers at some chains.

Consider a Credit Union

Credit unions are nonprofits owned cooperatively by members (people with an account at the credit union). They offer many of the same services as banks but give more savings and profits to members. Fees and interest rates may be lower on credit cards and loans, and checking and savings accounts may pay higher interest compared with other financial services firms.

Share and Save

Families, friends, and neighbors can share all sorts of things to save money. Power tools, lawnmowers, and luggage are just the start. Look for ongoing savings by sharing phone plans or streaming video subscriptions, too.

Don’t Fall Victim to Nuisance Debt

Small debts can have a large effect on a credit score if they go unpaid and get passed on to a collections agency. Newer credit scoring models ignore debts of less than $100, but not all lenders use the latest models.

Photo credit: Andrey_Popov/shutterstock

Choose Eateries With Free Refills

Many fast food and fast-casual restaurants offer unlimited refills. Chains with this perk have included Taco Bell, Chipotle, Five Guys, Olive Garden, McDonald’s, and In-N-Out.

Do Your Own Car Maintenance

Some car repairs, such as an oil change or brake pad replacement, are relatively easy DIY chores. Other fixes generally require a trained mechanic and could be costly. If a problem arises after the warranty has expired, it may be possible to save money by contacting the manufacturer for “goodwill assistance.”

Fight the Temptation to Eat Out

Keep food costs down by buying in bulk, using a slow cooker, eating at home, and saving leftovers for another meal. Keep small snacks in the car or at work to avoid the urge to go to restaurants.

Keep the Grocery Budget Low

To keep from overspending at the grocery store, eat before going shopping, make a list, and use only a set amount of cash to buy food. (Splurge once in a while to keep things interesting.)

Buy a Mattress Online

Many sound sleepers advocate buying a mattress online. Shops such as Casper, Leesa, Tuft & Needle, and Marpac Yogabed sell high-quality foam mattresses starting around $500. Search for discounts and coupon codes for further savings. There are also inexpensive options on Amazon, but they don’t offer the same warranties or trial period.

Improve Gas Mileage

Start tracking your vehicle’s gas mileage, and focus on ways to improve it. Some simple tips include maintaining proper tire pressure, checking the tire alignment, and accelerating slowly.

Shop Costco Without a Membership

Costco doesn’t require a membership for every purchase. Anyone can eat at the food court or get a flu shot. In some states, non-members can buy alcohol, as well.

Keep Vet Bills Low

To save money on pet care, shop around before choosing a vet. Look for discount packages and focus on preventive care. Regular exercise and a proper diet of high-quality food are keys to keeping pets healthy.

Get a Side Gig

Cutting back can help only so much, and there are lots of ways to make money on the side. Become a mystery shopper, tutor, organize or clean homes, babysit, or drive people using a ride-share app.

5 Blockchain Security Risks and How to Reduce Them

By some estimates, blockchain technology companies can expect revenue to top $6 billion by 2020. That’s the good news. The bad news is that actual earnings may be impacted, or even crippled, if blockchain security vulnerabilities remain a sidenote to the conversation on distributed ledger technology (DLT).

Listen to the audio version of this article:

Security vulnerabilities? What security vulnerabilities?

The notion that blockchain security is even an issue at all comes as a surprise for some. And therein lies the danger. While the security features inherent in blockchains make DLT resistant to attack, they do not make it immune. In fact, DLT technology is subject to a number of issues that centralized data bases are not.

Yes, blockchain is eons beyond competing database architectures in terms of keeping data secure, but that is not the end of the story. Blockchain security risks do exists, and they must be recognized and mitigated if blockchain is keep its promise to transform how data is stored and acted upon.

As more governmental, industrial, and commercial sectors adopt shared distributed ledger technology (DSLT), the need to address these issues sooner rather than later becomes paramount. Key to action, though, is creating awareness, which is the purpose of this post.

Blockchain Vulnerabilities

1. Endpoint Vulnerabilities

One of the most likely vulnerabilities with DLT originates outside the blockchain itself. Termed “endpoint vulnerabilities,” these issues nonetheless reflect on the security of blockchain technology as a whole and so they must be addressed.

Endpoints, just as you might expect, are the spaces where humans and blockchains meet. For the most part, endpoints are the computers that individuals and businesses use to access blockchain-based services. Whether providers of such services are financial institutions, industries, or cryptocurrencies, the use of a blockchain begins with information being inputted into a computer and ends with information being outputted from a computer. It is during the process of accessing the blockchain that the data on the chain is most vulnerable.

Have a Blockchain Project in mind?

We are here to discuss.

The reason comes down to the credentials that are required to access a shared distributed ledger, and how those credentials can be exposed by security weaknesses at the endpoints. While there are blockchain limitations, this is more of a limitation of the user, as we shall see.

Public and Private Key Security

Access to a blockchain requires both a public and a private key. Keys are cryptic strings of characters of sufficient length to make the odds of guessing them truly astronomical. Since it is essentially impossible to access data within a blockchain without the right combination of public and private keys, this represents the strength — and the weakness — of blockchain technology. Without the right keys, no hacker will be able to access your data ever. On the other hand, all a hacker needs is the right keys to access your data and do with it what they will. In the world of the blockchain, possession of keys and ownership of content are totally synonymous.

Since hackers know there is no use in trying to guess anyone’s keys, they focus a great deal of their time on stealing them. The best chance of obtaining keys is to attack the weakest point in the entire system, the personal computer or mobile device.

The same security vulnerabilities that make computers, Android, and Windows mobile devices susceptible to malware also makes them targets of blockchain hackers. Anytime blockchain keys are entered, displayed, or stored unencrypted on such devices, the prying eyes of hackers can capture them. Unfortunately, most of us make the hacker’s job far easier than it needs to be by failing to adequately protect our devices.

The following simple steps are highly effective at keeping hackers from stealing your blockchain keys:

  1. Use a good antivirus for Windows and Android devices, and make sure you keep both AV and operating systems updated.
  2. Run anti-malware scans regularly.
  3. Never store your blockchain keys in a text file, Word Document, or other file where they can be easily read by unauthorized person. If you must store your keys on your device, use a reputable encryption application to keep them safe.
  4. Never include either of your keys in the body of any email to anyone for any purpose. If you must share via email, use the email feature of your blockchain wallet.

Just as keeping all the rest of your data safe from hackers requires a common sense approach, it is easy to keep your blockchain keys from leaving your computer or mobile device by taking a few simple steps.

2. Vendor Risks

A distributed ledger is of no value unless we can move information into and out of it. As DLT gains more adoption, the market for 3rd-party solutions will experience tremendous growth. We can expect to see 3rd-party development within the blockchain ecosystem within these top six areas:

  1. Blockchain integration platforms
  2. Payment processors
  3. Wallets
  4. Fintech
  5. Blockchain payment platforms
  6. Smart contracts

The requirement for DLT solutions has created burgeoning new markets for blockchain development. It has also created the potential for surface exposure through vendor risks. Organizations wishing to deploy 3rd-party blockchain apps and platforms must be aware that the security of their blockchains is no greater than the trustworthiness of their vendor.

Weak security on their own systems, flawed code, and even personnel vulnerabilities can expose their clients’ blockchain credentials and data to unauthorized persons.

The threat from vendors is especially true when the product involves smart contracts. Since an organization’s entire operation can, to a greater or lesser degree, reside as a smart contract on a blockchain, a vulnerability here can be catastrophic.

Avoiding vendor-related blockchain weaknesses requires a thorough vetting of every vendor who would contribute to your blockchain ecosystem. Experience and reputation are the key factors that should help you separate those who can help build your business from those who could bring it crashing down.

3. Untested at Full Scale

One of the key blockchain security concerns is one that many in the industry would prefer to not think about: what happens at full scale?

DLT architectures are inherently scaleable. In fact, every time any change whatsoever is made to the blockchain, it scales up. After a certain number of changes, it scales up by one data block. To date, there have been no significant security issues arising from the organic expansion of blockchains. However, the Financial Stability Oversight Council (FSOC), a US government organization, isn’t so sure that will remain the case.

According to the FCOS, the growth of blockchains poses at least two risks that are associated directly with the blockchain:

  1. Since the blockchains of today are as large as they have ever been, we are approaching unknown territory with every gigabyte of expansion. The limited experience of the DLT industry means limited experience identifying and responding to problems. As with every technology, from airplanes to autonomous cars, experience comes at a price. The price for a blockchain security failure has not yet been high enough to require a major change to the system, which is both good and bad.
  2. The FCOS is also concerned that blockchains could be susceptible to fraud, if a significant number of participants conspire against the rest of the participants. Known as a majority attack, or as the 51% problem, this theoretical threat could materialize, considering that a large number of mining farms are built in nations where electrical power is cheap, and oversight questionable.

The blockchain security challenges exposed by the FCOS are valid. As for the danger of the unknown, the only solution is for every participant in the blockchain ecosystem to exercise best practices in all regards when developing or using distributed ledger technology. Mistakes are inevitable, and for those who make them the price will be high. However, the only way to gain experience with DLT is to forge ahead, albeit as wisely as possible.

Keeping the consensus architecture from being corrupted is probably not as hard as it might seem. Well-designed smart contracts are more than capable of preventing such collusions from occurring.

4. Lack of Standards and Regulation

According to Forbes, among many others, one of the primary blockchain security issues is the lack of regulation and standards.

The mere mention of either regulations or standards puts blockchain purists on high alert. Isn’t blockchain the antithesis of governance and compliance?

If you are talking about Bitcoin and cryptocurrencies, a valid argument can be made that they should continue to enjoy the anonymity that fueled the very growth of blockchain. While some — especially government regulators and legacy financial institutions — will argue that even cryptocurrencies must be regulated, a sizeable number of participants will staunchly oppose such notions.

However, the anti-authoritarian approach has no place in most of the sectors where blockchain innovation is the greatest.

If we refer back to the second vulnerability discussed in this post, Vendor Risks, it becomes difficult to see how any of the 6 applications mentioned could not benefit from some level of standardization, if not regulation.

The lack of standard protocols means blockchain developers cannot easily benefit from the mistakes of others. With each company, each consortium, and each product operating by a different set of rules, the risks that come from nonstandard technology of any sort are present.

Further, at some point, chains may need to be integrated. Lack of standardization can mean new security risks as diverse technologies are merged.

The solution to the question of standards and regulations is more complex than that of most of the technical issues. However, these questions will eventually resolve themselves. Similar to many other technologies, evolution will ultimately bring about the following arrangement:

  1. Forced regulation and standards where it makes sense.
  2. Self-imposed regulation and standardization among consortiums in areas where innovation is necessary.
  3. No regulation or standardization for blockchains built in-house and only used internally within the organization.

5. Untested Code

Despite the nearly 8-year history of Bitcoin, blockchains not dedicated to cryptocurrencies are still heavily experimental. As such, some DLT creators are tempted to deploy insufficiently-tested code on live blockchains. One now-infamous example is that of The DAO attack.

Here’s the background.

A “DAO” is a Decentralized Autonomous Organization built on the blockchain, which exists for the purpose of executing code for venture capital smart contracts. You might say a DAO is a crowdsourced venture capital fund built and existing entirely on a blockchain. There are many DAOs, each built to host and execute smart contracts for specific organizations. A more in-depth explanation of what a DAO is can be found here.

One such DAO, known as “The DAO,” was founded 2020 by members of the Ethereum team. During its creation period, The DAO made crowdfunding history by raising $150 million. Shortly thereafter, The DAO made history, again, by being the first DAO to be hacked.

During the crowdsale, many members of the Ethereum community expressed concerns that the DAO code was susceptible to attack. Subsequently, one of the DAO found a “recursive bug” but erroneously believed that no DAO funds were at risk. A hacker proved him wrong.

The hack resulted from the attacker exploiting two vulnerabilities in The DAO code. The hacker knew that the code was designed to allow both a split, and a transfer of tokens between accounts. The hacker also realized that the code would not update account balances fast enough to prevent transferring the same tokens more than once.

The result? The hacker executed a split function, creating a “child DAO” account, and made repeated transfer requests from their first account in rapid succession. Since the code did not decrement the original account balances after each transfer, there was nothing to stop the same tokens from being replicated about 40 times each, without the original tokens being destroyed.

After transferring $55 million worth of Ether, the hacker ended the attack for reasons still unknown to the rest of us.

In the end, The DAO was devalued by a third, and blockchain technology became the subject of articles such as this.

There are at least two good solutions to this type of exploit:

  1. Heavy peer-review of code before deployment.
  2. Smart contract testing performed by independent testing facilities.

Either of these actions would have identified the flaws that resulted in The DAO hack. Either will also prevent similar and worse scenarios of future innovators.

How Ignite Can Help

Blockchain technology has proven itself robust and secure. This does not mean that there are not blockchain technology problems that can affect the security of the entire ecosystem.

Obviously, there are.

Navigating the highly complex world of blockchain development requires a thorough understanding of the security issues and how to mitigate them. Ignite stands ready as your technology partner as you add blockchain integration to your verticals.

Why not contact us today for a no-cost consultation?

Best Binary Options Brokers 2020:
  • BINARIUM
    BINARIUM

    Best Binary Broker 2020!
    Perfect for Beginners!
    Free Trading Education! Free Demo Acc!
    Get Your Sign-up Bonus Now:

  • BINOMO
    BINOMO

    Trustful broker.

Binary Options Trading School
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: