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Cryptocurrency Security: How To Protect Your Digital Investment

cryptocurrency-security

Cryptocurrency security encompasses everything you need to know about the potential dangers with cryptocurrency, as well as the fundamentals of what you can do to make your setting related to your crypto investments or trades safer and safeguard your crypto assets. 

You should be aware that a centralized cryptocurrency service does not offer the same level of money security as a bank. Crypto brokers, for example, are not as tightly regulated, and if funds are lost, they can be lost permanently. It is vital to keep yourself updated with information on cryptocurrency security to know what can go wrong and how to prevent such situations from arising.

Let's understand how secure cryptocurrency is first.

How Secure Is Cryptocurrency?

Blockchain technology is commonly used to create cryptocurrencies. The method transactions are recorded in "blocks," and time-stamped is described by blockchain. It's a lengthy, complicated procedure, but the result is a secure digital ledger of cryptocurrency transactions that hackers can't influence.

Transactions also necessitate a two-factor authentication process. While security measures are in place, this does not mean that cryptocurrencies are immune to hackers.

It is obvious to wonder why cryptocurrency security is so stressed when cryptocurrency is somewhat safe. Let's understand the risks that arise while engaging in the crypto sector.

Risk 1: When people leave cryptocurrency on exchanges

Many people leave their cryptocurrency on exchanges when they first start trading cryptocurrencies. It's easy since the funds and crypto coins are readily available for transactions. Still, hackers, unfortunately, also love the idea that so much cryptocurrency is in one single location, ready for the taking. Moreover, exchange hacking is not confined to other parties; employees and even exchange founders have committed significant fraud. 

Risk 2: Storing Cryptocurrency Locally

In contrast to leaving seed phrases in centralized cloud storage, several examples of seed phrases are backed up on local devices and subsequently being lost or stolen, or the PIN/Password is forgotten. The problem with local storage is that it's easy to misplace it or for someone to track you down and steal it.

Risk 3: Being targeted by criminals.

The possibility of your crypto being targeted is quite real because so much of the personal information is out available to anyone who wants to target us. Email phishing attacks, SIM Swap assaults that bypass 2-factor authentication, and other smart social engineering tactics are all examples of personal assaults. In 2020, DeFi protocols were used in the majority of crypto thefts (50 percent).

Risk 4: Accidental loss and natural disasters

The amount of cryptocurrency lost due to accidents and natural disasters is challenging to estimate. However, it is estimated to be in the billions of dollars. Accidents have played a role too. Many people believe that the most common cause of loss forgets PINs and passwords, even if you take safety measures. But accidents and natural disasters are also a possibility. This factor is usually missed out a lot while addressing the issue of cryptocurrency security.

Risk 5: Loss of generational wealth

We don't usually think about death or incapacitation when contemplating how to enter the whole new world of crypto, but the repercussions of how crypto is secure mean that certain safeguards must be taken to maintain the accessibility of funds by future generations. This begins with consulting with a trust and estate lawyer to create a will and a strategy for distributing assets to beneficiaries.

Cryptocurrency Security - Measures to take

Hackers' work might be difficult to track since their digital footprints might be erased. Investors have little legal recourse if their cryptocurrency account is hacked because the virtual coins are currently unregulated by any government organization or central bank. So the next part of cryptocurrency security is knowing about necessary measures to take.

1. Research About Exchanges

Learn and research extensively about cryptocurrency exchanges before you invest a single dollar. These platforms let users purchase and sell digital currencies, but there are different exchanges to select from. Before making a decision, do your homework, study reviews, and speak with more experienced investors.

2. Know How to Store Your Cryptocurrency Safely

You must store cryptocurrency if you purchase it. You can save it in a digital wallet or on an exchange. While there are numerous wallets, each has its own set of advantages, technological needs, and security features. You should research your storage options before investing, just as you would with exchanges.

3. When it comes to digital wallet security, use a hybrid strategy.

Online wallets are becoming increasingly popular, attracting the attention of hackers. The majority of a consumer's cryptocurrency should be stored in offline or physical wallets, with only a small amount kept in an online wallet. The physical wallet should be kept safe, such as in a safe or a safety deposit box. Separating the private and public keys is also a good idea. When possible, both should be secured using complex passwords and multifactor authentication.

4. The use of two strong passwords is essential.

Never use the same password for several accounts, especially since cryptocurrency services are a popular target for cybercriminals. Assume that they will all have a data breach at some point. Limit your risk using a different, strong password for each, preferably with two-factor verification and password rotation.

5. Engage with trustworthy cryptocurrency wallets, exchanges, brokerages, and mobile apps.

Investors should carefully examine each platform's security features before picking which to use to understand how their data will be secured. When keeping crypto, entities who can be trusted should have taken optimal security measures, including multi-factor authentication, SSL/TLS encryption, and air-gapped devices kept offline. Whether you're using one or multiple cryptocurrency platforms, it's critical to keep a secure password manager on hand to avoid losing credentials.

6. Keep the secret key to yourself.

The secret key is used to verify that the person sending or receiving the digital currencies is the wallet's owner. Cold storage is the safest technique to store your private key. Printing out your key and erasing all digital traces of it is what cold storage entails.

Conclusion

You can only select the best way to pick and set up your crypto wallet and other digital assets with seed phrase backups and other wallet setup options and hope to avoid tragic situations from taking place. But keeping yourself posted with information and updates related to cryptocurrency security is usually the best option when it comes to taking the best measures for staying safe in the crypto world.

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Comments: (2)

Kendrel Francoise
Kendrel Francoise - active bonorum - Jerusalem 22 June, 2021, 12:30Be the first to give this comment the thumbs up 0 likes


Yes, there are ways but caution must be duly exercised since rogues have dominated the system of investments and

Activebonorum .c o m  is your best expert when it comes to recovery of lost funds and from scam. Get on the site and file a case with the contact form to send it.

How did you lose this money? The reason for this question is that different questions require a peculiar answer.

Was this money stolen via fake investment, manipulation of password, through the installation of AnyDesk or Team viewer? If this is the case, you have a glare of hope. However, if this was lost through the purchase of an item from a recognized online platform, write to them and report the website.

If this was lost through fake binary options, reaching out to security/recovery asset tracing company ACTIVEBONORUM website .

Software devices of the company you sought to engage totally matters. Ensure that they have like the company above Blockchain Chain Network Algorithm Radar; that could do the task. The expertise of the software engineer is also of great priority because they have always been helpful to me .

Kendrel Francoise
Kendrel Francoise - active bonorum - Jerusalem 25 June, 2021, 14:13Be the first to give this comment the thumbs up 0 likes

Investors have become increasingly optimistic about the whole blockchain phenomenon and some are going as far as to predict that people will be paying solely with their bitcoin wallets as soon as 2030. Unfortunately, with every great invention, there is always a downside. The problems creeping up into bitcoin payments has been the inability to trace or recall a payment once the payment has been issued. For instance, if you paid the wrong person using bitcoin, it is impossible to recall that payment and the money you paid is usually lost forever. Trading scammers have caught onto this fact and are getting clients to buy a cryptocurrency and then transfer the crypto to a trading platform.

What exactly do the scammers do?

A person will get a random call from a broker saying that he can make a 30% return every single week trading Forex. All he has to do is open a Luno account; a crypto wallet that enables you to store various cryptocurrencies such as bitcoin, and buys 200$ worth of bitcoin and then sends it to a particular trading platform to start making some money. Once you deposit the cryptocurrency you might find yourself unable to access your trading account, or, even if you are able to access your account, they do not let you withdraw your funds. These trading platforms sometimes claim that in order to withdraw your funds you need to first deposit an additional 200$ in order to start the withdrawal process. Why would you have to give someone more money in order to withdraw money that you put there in the first place?!

Why paying with crypto makes it very difficult to recover your fund and how a crypto transfer differs from a bank transfer

The way the algorithms work behind crypto is each cryptocurrency has a special code and once you transfer that ‘code’ to someone else it is almost impossible to retrieve it. You are not transferring money or anything tangible to the trader, you are transferring the code into someone else’s account and it now becomes his.When you do a bank transfer to someone, the bank has that transfer on record and can recall that exact transfer to your account if they want. Cryptocurrency works differently. When you buy crypto, you get a specific code and when you transfer this code it is impossible to trace. The only way to get your money back is if the company decides to offer you a refund. The refund that they give you is not the initial cryptocurrency that you gave them, rather they will give you cash with the same value of the crypto you lost.

Lost about $45,000 to a crypto investment scam just recently. The company posed as an investment company that could deliver a certain percentage in returns if you deposit your Bitcoin with them. At first, it seemed real, it worked twice. I didn't realize they set up a bot(robot) that will completely shutdown your account after you have decided to invest high. I suddenly couldn’t access my profile, I complained to the admin, he gave excuses that they had a downtime and needed to upgrade their website, this took over 2 months. Within that period,I began to suspect I had been scammed. I contacted my bank to see if they could do anything about this situation, they couldn’t. Local police say it’s impossible to get my money back. I got in contact with a certified recovery specialist by filing a case with the contact form on website (ACTIVEBONORUM) who helped me with refunds.

Nischal Shetty

Nischal Shetty

CEO

WazirX

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Mumbai

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This post is from a series of posts in the group:

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