The early 2010’s saw the inception of Bitcoin, one of the first cryptocurrencies available to the mainstream. Sure, mining for it had a way to run up an electricity bill, and places to spend it were scarce at the time, but the fact Bitcoin existed was enough of a catalyst to kick off the cryptocurrency industry.
Thanks to Bitcoin, the cryptocurrency market has grown significantly, attracting investors of all types! And while investing into cryptocurrency is a smart way to make some extra money (if you have the money to spare, of course), the crypto industry has its own share of problems.
The Pitfalls of Cryptocurrency Security
Cryptocurrency suffers from plenty of issues, the main one being volatility, but security has also become a pressing issue. Let’s go over a few security issues currently plaguing the crypto industry.
1. The Growing Case of Crypto-Fraud
No one wakes up expecting to become a victim of fraud. Unfortunately, that’s the reality of hundreds of thousands of people per year, and the cryptocurrency market is no exception.
Cases of crypto-fraud have spiked in the past few months, most likely due to the ongoing COVID-19 pandemic. Examples of crypto-fraud include Ponzi schemes, fake crypto-wallets, and vice versa. There are many types of crypto-fraud, and learning how to identify them is vital to protecting your investments.
2. The Upcoming Dangers of Phishing Scams
One form of crypto-fraud that’s worth shining a spotlight on is that of phishing. You’ve probably experienced phishing before, whether it be in the form of a scam email, a sketchy website, or a random phone call from “Microsoft”.
Phishing scams rely on tricking individuals into giving out personal information. Certain cybercriminals attempt to trick cryptocurrency investors into giving out their wallet information. Or—if given the tools—use major accounts to trick people into donating cryptocurrency to their wallet.
3. The Rise of Disreputable Trading Platforms
What good is currency without a place to spend it? Trading platforms are the lifeblood of cryptocurrency, allowing investors to trade, sell, and exchange various forms of cryptocurrency. Unfortunately, like some official banks, not all trading platforms are secure.
In fact, some trading platforms exist only to scam users.
Ways to Secure Your Cryptocurrency Exchanges
Volatility is far from the only threat facing cryptocurrency. But what can be done about these security threats? Fortunately, investors have plenty of options at their disposal.
1. Use a VPN
One of the benefits of using cryptocurrency is the lack of a digital footprint—the lack of a financial trail. This helps investors achieve anonymity. However, only so much anonymity can be achieved through Bitcoin.
Using a VPN app allows cryptocurrency investors to achieve total anonymity online, allowing them to trade cryptocurrency in peace.
2. Use a Multi-Signature Address
Crypto-wallets allow investors to store their cryptocurrency, whether it be Bitcoin, Ethereum, or even Dogecoin, in a safe, secure environment. Well, most of the time.
Unfortunately, not all crypto-wallets are created equally in terms of security, and it’s important to pick a secure wallet. A popular security recommendation is to stick with crypto-wallets with multi-signature addresses, addresses that require multiple people to sign off on a cryptocurrency transaction.
3. Educate Yourself on Scams
Phishing scams plague every corner of the Internet; there is no area on the Internet that’s invulnerable to phishing. That’s why learning how to identify phishing scams is vital for investing in cryptocurrency.
Take some time out of your day to read up on the various phishing scams present today and how to combat them.
4. Research Reputable Trading Platforms
Any developer with decent funding and a good team behind them can create a trading platform. And while this makes for great accessibility, it also opens up the possibility for cybercriminals to create unsecure and dangerous trading platforms.
Even many popular trading platforms lack proper security. Be sure to research which trading platforms offer the most security for its users!
5. Subscribe to Secure Email Services
When investing in cryptocurrency, you want to do two things: leave as little a digital footprint as possible and keep communication secure. Subscribing to a secure email service accomplishes both.
Services like ProtonMail or Posteo help investors stay secure, and it’s a smart idea to use those services for anything crypto-related.