Just like in any other business investing in cryptocurrency can have its own risks. The crypto industry keeps growing and more opportunities to invest arise every day, but on the other side so do the risks! As an entrepreneur, there are always obstacles ahead when you decide to invest somewhere or start a business from scratch, whether it is a physical or virtual business.
The virtual business world is a little bit different, especially for those who do not have experience-newbies. Many people start their own online businesses without any prior preparation and many end up being victims of various hacks and attacks. Inevitably cryptocurrency has not been left untouched by these attacks throughout its short history.
Although cryptocurrencies by themselves are safe since they cannot easily be hacked because they are based in cryptography and it would be hard to let’s say hack a private key or the whole blockchain, hackers still have a chance when it comes to wallets if the owner is not careful enough!
Through the history of crypto, attacks have been made in different forms such as scamming, phishing, hacking or supply chain attacks. According to Wikipedia in 2018 due to scams, theft and fraud around $1.7 billion U.S. dollars in cryptocurrency were lost. Then only in the first quarter of 2019, the losses went to $1.2 billion U.S. dollars. It sounds mindblowing!
Cryptocurrency exchanges such as Bitstamp, Bitfinex, Mt. Gox, Coincheck NEM, Nicehash have all been victims of various attacks losing millions of dollars. Therefore, you might always be prepared!
Cryptocurrency Security Tips Before You Start Trading
Well as we were talking earlier cryptocurrency can be intimidating for new users who want to get into the industry. With so many people rushing to invest it is really important to be aware of the concerns that are surrounding this market. As a newbie, you need to take precautions to keep your funds safe, so we are here to help!
1. Choose a trustworthy cryptocurrency exchange
These are many crypto exchanges out there such as Binance, Bitmex, Coinbase, etc. You must always do some research before starting to trade. So, while you are researching and before you start trading, check the most trustworthy exchanges rated by many users that have been trading for a while. We know that security matters and we want you to always be safe. Crypto can be risky so make sure you pick an exchange you can trust.
2. Make sure you keep your device safe
Always be careful with the device you use for your crypto business. Do not download anything that you are not sure about its security. Make sure you have an updated antivirus installed and always do deep research about any software that you are thinking to install so viruses don’t get through into your computer. In February 2014 one virus spread through the internet had stolen up to $220.000 U.S. dollars from cryptocurrencies including bitcoins from 85 wallets. So, be careful about what you are installing in your device!
3. Beware of phishers
Many scammers out there create websites that look like real crypto exchanges so new investors enter their data thinking that those websites are legit and this way they end up being victims. The hackers then take the data and use it to get to your wallets. Many times these scammers send E-mails as well, directing users to these shady websites. To avoid entering these grey areas you must always remain vigilant and double-check the URL-s to ensure there are no unusual characters.
4. It can be a fluctuating market
Bitcoin changes its price constantly. You should be careful when picking the time to invest because it is one of the most important things in this industry. You got into the industry to make money, not to lose. The crypto market goes back and forth constantly so there can be times when you purchase bitcoin at a higher price and then days later you might end up selling it for a lower price. Many have been skeptical describing it like something where only people at the top make the money since they have the most experience. But do not be discouraged, get your act together, follow the market and pick the right time to purchase!
5. Do not trust everybody
If someone you don’t know approaches you and offers you something you should actually be skeptical. Scammers use different platforms and social media to reach you out and offer to collaborate. You must always be aware and not share important stuff to someone you don’t know. Scammers are always lurking on the internet waiting for their chance to jump. So, do not overshare your information but keep it for yourself and share it only when it is necessary!
6. Not an old technology
Although bitcoin was released a decade ago, cryptocurrency still remains a young technology. It is still developing! Even though we expect it to last for a long time we never know what the future will bring. So, make sure you approach your investments with diligence and caution. Brace yourself for the future of the market, by taking the necessary steps to secure your funds!
7. Make sure you use a hardware wallet
Hardware wallets are the most secure ones to store your keys. Hardware wallets are often referred to as cold storages. They cannot be hacked since they are specialized devices that store the keys inside an impenetrable circuit. They have many advantages over software wallets since the keys cannot be transferred out of the device in plaintext.
Well, since there have been various attacks in the past and many people have ended up disappointed it seemed necessary to write an article with this topic. As we saw the risks are two types: from the own industry itself since it is a risky business and not predictable, then from the hackers, cyber-attacks, and scammers who will try to rip you off! So be aware and do not let this become a two-edged sword.