Even though blockchain technology was primarily designed for secure transactions, its online and lucrative nature make it a highly attractive target for cyberattacks.
While many criminals use social engineering to dupe users into handing over their cryptocurrency or account credentials, others up their game by hacking directly into exchanges as well as online wallets to steal crypto coins. So, if you are a crypto trader out there, it is imperative that you know and understand these attacks and take the necessary precautions to stay safe in the industry.
So, how secure is the cryptocurrency industry?
Generally, it is quite difficult to hack the bitcoin network. However, because it involves online transactions, there is always a risk of coins being stolen from a digital cryptocurrency exchange. The cryptocurrency network is underpinned by blockchain technology, which incredibly very hard to hack.
To be more precise, in blockchain technology, data is not kept in a central server, rather, it is stored across a large computer network that constantly checks and verifies if the records are accurate. This arrangement makes hacking a lot tougher to execute since a hacker will be forced to technically breach numerous servers to access the stored data.
But as earlier explained, the world of cryptocurrency isn’t immune to cyberattacks. For instance, in 2019, hackers stole at least 7,000 bitcoin from Binance, one of the largest crypto exchange platforms. This shows just how cryptocurrency trading can be susceptible to online theft. So, today in this post, we are going to provide you with practical and effective on how to keep yourself secure in the cryptocurrency world.
Trade with highly reputable cryptocurrency exchanges, wallets, brokerages, and mobile apps:
This is arguably the most important step traders need to take before venturing into any form of cryptocurrency trade. Before you choose what platforms to use, you need to first carefully research each and every platform’s security features just to catch a glimpse of how they store and protect their data.
The rule of thumb is to only work with entities that incorporate the best security practices such as requiring multifactor authentication, TLS/SSL encryption as well as air-gapped devices that are kept offline storage for cryptocurrency. Though most established cryptocurrency exchange platforms are adopting some of the best industry practices when it comes to security issues, it is always a good idea to carry out your own research just to ensure your coin’s safety!
Be aware of mobile phishing:
Phishing attacks on mobile devices are becoming worrisome for security professionals because the cases are only continuing to rise. And according to Verizon’s 2020 Mobile Index Security Report, these attacks are becoming even more sophisticated. A significant number of crypto traders often use mobile applications to manage their accounts.
As the value of cryptocurrencies soars in price, malicious hackers are highly motivated to target investors who access their exchange accounts with mobile gadgets using mobile phishing campaigns to steal their login credentials.
It is imperative to note that these mobile phishing attacks can come from nearly anywhere, from social media, text messages, email, or third-party messaging platforms. Besides phishing, there are suspicious mobile applications that can maliciously log your keystrokes or spy on the activity on your screen.
Most investors are usually quick to install antivirus software on their computer devices, thinking that their mobile gadgets are somehow safe! However, the truth is that considering the considerable amount of data we currently store on our mobile phones, you also need to secure your phones as well.
Never share your secret key with someone else:
For those who don’t know, in cryptocurrency, a security key is used to ascertain that the individual who is either receiving or sending the cryptocurrency coins is the valid owner of the wallet being used. As a result, this is an important thing that you should share with anybody.
Most crypto experts agree that the safest way to secure your private key is by using cold storage. Because attackers can easily gain access to digital storage applications, keeping your secret key online is always a great risk. With cold storage, you only need to print out the key and store it somewhere safe and secure.
Don’t use wallets hosted by providers:
Common methods of storing crypto coins are desktops and wallets hosted by providers. Every crypto professional out there will tell you that those hosted by providers are the riskiest choice! This is because you are simply surrendering your secret key to them and allowing them to keep your private key on their servers.
This is arguably the most common choice perhaps because it is cheaper and also demands the least technical effort. Unfortunately, it puts you in a number of risks, including the crypto exchange going out of business for unknown reasons, a breach of the server of the provider, among others. To be on the safest side, use a hardware wallet that allows you to keep your secret key yourself.
And this implies that even if the company gets hacked, or compromised in some way, you won’t experience any problem with your coins.
Always use strong passwords and two-factor authentication:
Because cryptocurrency services are a prime target for thieves and hackers, you should never reuse passwords across your crypto accounts. The best way to secure your crypto wallet is to use tried-and-tested security tactics.
And this involves having extremely unique, strong passwords with two-factor authentication. Using a reputable password manager may help you automate this process and help limit your exposure to cyberattacks.
Avoid public Wi-Fi like a plague!
If you are going to trade safely and successfully in cryptocurrency, you should never use any public internet connection to access your crypto accounts. If you didn’t know, Wi-Fi can divert your browser to any web page, which may sometimes be a mimic version of your wallet.
Also, hackers can use public networks to access the data transmitted through them, and this includes your passwords and other important information. And even when accessing your accounts via your home network, use a VPN for added security. A VPN automatically alters your IP address as well as location, keeping all your browsing activities private and safe from potential hackers.
Make sure your devices are secure:
Make sure all the devices you regularly use to conduct your transactions, including mobile phones, computers, and laptops are up to date with the latest virus definitions to ward off any newly discovered vulnerability. Install a robust anti-virus and firewall to enhance the security of your devices to prevent thieves from hacking your accounts.
The Bottom Line:
As cryptocurrency continues to gain popularity, many people, even those who don’t have much information regarding how the industry operates are looking to diversify their portfolio by investing in crypto. However, it is imperative to note that these digital assets are not managed by a central bank or any authoritative body.
This simply means that the responsibility to protect your crypto investments is almost completely yours! We have provided you with practical and proven tips on how to keep yourself safe even as you engage in crypto trading.