Security Risks that Come with Investing in Cryptocurrencies

The cryptocurrency world has grown tremendously since the birth of Bitcoin in 2009, and for a good reason. The Blockchain technology offers more secure transactions for individuals and businesses, simplified supply chain communication, and a reduction in costs.

But, even with all the advancement, crypto investors still face one major issue: security. Trading and storing these coins come with a ton of security risks that you as an investor need to be aware of if you want to remain safe.

Lost or Destroyed Private Key

As a crypto investor, you’ll have to store your coins in a digital wallet controlled by both the private and public keys. Both of these keys are unique and in case the private key is destroyed, misplaced, or otherwise compromised, you may not be able to access the coins stored in that particular wallet, which means they will eventually get lost. Worse is if the private key gets stolen because then the third party may gain access to your bitcoins and steal them.

Phishing and Malware

Phishing and malware scams have heightened in the last few months as hackers take advantage of the anxiety brought about by the Covid-19 crisis and the large number of people who are now working from home and using less secure networks.

A large number of people are receiving phishing emails claiming that they visited adult websites and threatening to send the video content to friends and family if the victim doesn’t send money into their Bitcoin account.

Lack of Consumer Protection

The sad truth is that there is no consumer protection in a cryptocurrency transaction. You cannot correct any transaction errors, neither can you reverse a completed transaction. The only option you have after an erroneous transaction is to try and talk to the recipient to return them willingly. This is because there are no intermediaries in a crypto transaction like it is with bank transfers.

How to Protect your Coins

Crypto trading is an exciting investment for those who dare to take risks, but you must exercise caution to ensure that your investment doesn’t go down the drain.

Use Strong and Unique Passwords

One of the best ways to reduce the possibility of a successful hack is to make sure you are using strong and unique passwords at all times. A strong password is not easily cracked or guessed. Avoid using personal information such as family names or dates of birth, don’t use day-to-day dictionary words, and avoid using letters or numbers in sequence, for instance, abcd or 1234. Your password should be unique, with a combination of lowercase and uppercase letters, symbols, and numbers.

Always Use Secure Email Service

Most crypto investors use their normal Google or Yahoo email accounts when trading in cryptocurrencies, but that is not the wisest thing to do. This is because these email accounts collect user data and even track your online activity, which puts you, your login details, and transaction history at a higher possibility of being hacked. Therefore, consider using a much more secure email service that will keep your online activity a secret.

Use a VPN

It’s a good idea to consider buying a VPN subscription that will help you transact anonymously every time you are using an unsecured network that may make you vulnerable to hacking. A VPN encrypts your traffic and also conceals your IP address, protecting you from hackers.

As a crypto investor, it’s good to bear in mind that cryptocurrencies are decentralized and virtual assets with no traditional institutions to back them up. Always remember that the safety of your cryptocurrencies depends on you.