We’ve all been well aware of the hype cryptocurrencies like Bitcoin and Ethereum have created globally! The world of investment has considered cryptocurrencies to be highly rewarding as a source of investment. However, to be a wise investor it is also important to understand in detail crypto trading. It is advised for an amateur to be guided by a crypto expert before getting started.
It is however obvious that some commonly asked questions mostly seek answers for “Is cryptocurrency really as safe as it is said to be?”, “Does it involve no risk at all?”, “Are there ways to protect my digital investments?” “What are crypto security measures?” and many others.
In this following article, we will therefore learn about cryptocurrency security in detail and help you make your digital investments safe!
What is cryptocurrency?
Cryptocurrency is a digital currency that is secured by cryptography. It is easily verifiable through a decentralized network. Cryptocurrencies are mostly based on Blockchain technology and allow for faster, cost-effective, and secure online payments through the use of digital tokens. Cryptocurrencies also work on decentralized networks and are thus allowed to primarily function independently without any central authority interfering. Using secure platforms like Binance, Coinbase, Kraken, etc, and other crypto exchange platforms is also easy to purchase, trade, and invest in cryptocurrencies online. The most popular cryptocurrencies used in the market include Bitcoin, Ethereum, Cardano, Binance Coin, Tether, and a few others. Crypto exchanges are undertaken using a physical device that stores the public and private keys for crypto transactions, this is known as a crypto wallet. Crypto wallets essentially help keep your information secure by allowing you to encrypt and sign them. Crypto Wallet App Development Company could meet your business and personal investment needs if you struggle to understand the whole digital currency mechanism.
Is cryptocurrency secure?
Blockchain is the technology supporting cryptocurrencies. It lays the foundation for crypto exchanges. Blockchain technology involves a quite complex process. It is a digital decentralized ledger, where the transactions are time-stamped and stored in blocks encrypted with a hash. It is however highly secured as it does not involve any third-party authority and does not welcome any kind of manipulation from hackers. However, practically, the blockchain is not so immune to cyber-attacks and unlike in banks, if the money is lost in the crypto market it could be gone forever. It does not hold itself liable for any kind of lost funds like the banks. It therefore however comes with its own risk and is advisable to pool in the money only if you can afford to bear the losses. However, in the coming years, it can be expected to become much more efficient, and thus take up more security measures. But risks come with all the investment sources and cryptocurrency could be no exception. Although amongst all this, we can not forget some of the prime benefits it provides like the two-stage authentication process one has to undergo before making cryptocurrency transactions. It is yet highly advisable for companies to make wise decisions before trading using cryptocurrency security standards. Seeking help from a company that provides Blockchain Development services and Solutions could however help protect you from any kind of irresponsible mishaps occurring.
Let us now understand the risks that accompany cryptocurrencies and what measures can be taken to prevent them:-
Risks:
Individuals leave cryptocurrencies on a single exchange: Most people, especially amateur users tend to leave their cryptocurrencies on single exchanges when they begin trading. By doing so individuals are making it easy for hackers to trace out their data and illegally acquire all the funds from one location without letting the individual know who stole all of his/her money. Not just third-party hackers but some exchange founders and employees too happen to indulge in this kind of counterfeit and it becomes far from impossible to trace out the real criminal.
Storing cryptocurrencies locally: It is however understandable by now that it is much simpler to track down a transaction and steal it from the authorized person thus making the data vulnerable if stored locally on devices especially like in centralized cloud storage. Because, if the device gets stolen or if the password gets forgotten, then it will become conveniently easier for a third party to access it and track it down from the concerned person.
Becoming special targets: Crypto puts out much of our personal data publicly, this makes it easier for hackers to personally target our presence and hit right back. Sim swap attacks for clearing two-way authentication, supply chain attacks, Email phishing attacks, and by employing some killer social engineering strategies which indicate general computer hacking also.
Loss due to the occurrence of natural disasters or accidents: Cryptocurrencies can provoke great losses if the individual meets uncertain death due to accidents and by natural disaster. It has caused damage to around billions of dollars. This has been a major setback in the industry and is also commonly overlooked by investors.
Loss of generation wealth: while using crypto it is also necessary to think of unlimited possibilities to secure your data like death. It becomes necessary to take an account of all the possibilities life could throw at one and distribute your beneficiaries thus keeping it accessible to your future generation because crypto’s security policies do not allow any third person to access your beneficiaries otherwise. This could cause a loss of generation wealth. This could mean involving a trustee and estate lawyer to imply strategies for distributing assets to beneficiaries.
Prevention:
Cryptocurrency is currently not under the control of the government or any central authority and is used by most individuals to buy and sell goods and services. It is thus essential to present your digital assets and strive to protect them from sharp practices. Here are some preventive measures a crypto user can depend on:
In conclusion, it is always advised to invest in multiple cryptocurrencies and safe using stable coins like Tether(USTD), Paxos, DIA, US Coins(USDC), and others at the beginning of your crypto journey. Also, one cannot simply invest and stay disconnected from the crypto world. You as a consumer have to keep yourself posted with the latest information and updates related to cryptocurrency security. Only a thorough understanding of cryptocurrency could help you yield profitable returns and keep you safe from counterfeits.
