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Since Bitcoin introduction, cryptocurrency has become a hype globally. Bitcoin and Ethereum are the two top cryptocurrencies in which you can invest. It has become a popular option for people for investments. It accumulates around 300 million users from almost 150 countries. More than 700 cryptocurrencies have been introduced till now. Nonetheless, it is not always secure to make investments in cryptocurrencies.
However, the hype around cryptocurrency has also made people anxious about its security. Investors of cryptocurrencies might want to understand their security. Hence, before entering the crypto world, you must have proper knowledge about crypto trading. Also, you need to understand the parts that affect security.
Blockchain technology is the best cryptocurrency system that provides a secure platform to investors. Blockchain is a digital ledger in crypto transactions that keeps transactions secure from hackers.
Therefore, it is widely used by many organizations. However, Blockchain doesn’t make it totally resistant to hackers and cyber attackers. If your investment is lost in the crypto market, you can never have it back. Therefore, it is always recommended to investors that they must invest only that amount in crypto that they can afford to lose.
There might be a lot of questions stuck in your mind while talking about investing e.g., is cryptocurrency a secure platform? What measures can I take to ensure the safety of my investments? What are the crypto security measures? Therefore, in this article, we will briefly discuss cryptocurrency security so that you are guided thoroughly before investing in cryptocurrency.
Why are Cryptocurrencies Popular?
Cryptocurrency has gained popularity over the world because of its various benefits. It gives people power and also equality which is not possible with fiat currency. However, crypto is not controlled by any government. It is in the hold of developers, major investors of crypto, and those who help develop the currency.
Cryptocurrency is a decentralized ledger system which means that there will be no third-party involvement while investors are making transactions, and people can do peer-to-peer transactions. Because cryptocurrency is decentralized, cryptocurrency gets the factor of being anonymous in which no one can trace the location of the transaction. Sending or receiving money through cryptocurrencies is a very less costly and quick process. Because many visiting places like hotels & casinos offer a payment method of crypto transferring.
The reason behind crypto transactions being cost-efficient is that it cuts out the middle man while transferring payments. So it immediately reduces the cost because it is being done without any third-party involvement. The other reason cryptocurrency is popular is that transactions are made quickly, whether it is local or international. This is because payments are verified easily and quickly.
However, there might be some barriers, but these are from merchants who don’t accept payment through cryptocurrency. You can easily access cryptocurrencies through crypto exchanges to trade, invest and exchange.
Is Cryptocurrency Secure?
In the field of finance, security is the biggest concern of investors. The most critical question which arises while using cryptocurrencies is “how secure is Cryptocurrency?” and it makes us think whether the “crypto” in cryptocurrency really matters. Cryptocurrencies are secure due to their encrypted nature. Encryption is the process when data gets converted into code that can only be accessed by those who possesses keys to decrypt it.
Blockchain is the decentralized ledger technology that backs up cryptocurrency. However, this process is quite complex. Cryptocurrencies are processed in encrypted data, which is called Blockchain.
The data is recorded in blocks and is timestamped with the hashing method. Because of its complexity, it is quite impossible for cybercriminals to enter the Blockchain and make changes. However, we need to understand that even Blockchain is not totally secure. We need to understand the use of private keys and public keys and also crypto wallets to make efficient actions for the security of cryptocurrencies.
Public Key
A public key is used to encrypt only messages. It is a code that investors use to identify the crypto holder before sending them payments. A public key is sent to other people only for encryption purposes. Once a sender has encrypted a message with the public key, then you will only be able to access it using your private key.
Private Key
A private key is a secret key that people use to encrypt and decrypt messages. It is used with public keys. People must not share it with anyone. It needs to be kept private. Crypto wallets use private keys to protect one’s assets. For example, when you create a new Bitcoin wallet, you are provided with public and private keys. Private Key is associated with the wallet. Once you get the private key, you must back it up somewhere. Because if you lose the private key of any of your wallets. You can never access your wallet or your crypto assets.
Types of Crypto Wallets
When you are going to invest in cryptocurrency, you need to have your cryptocurrency wallet; it is the same as a bank account where you can store your assets. Every crypto wallet has a private key of 12-24 words. You need to back up this private key because if you lose it, you will never be able to access the cryptocurrencies in your wallet.
Crypto wallets also have different forms. They have two categories; hot & cold. A hot wallet is connected to the internet, while a cold wallet is offline. Below we are discussing types of wallets and how they work.
Hot Wallet
Professional crypto holders will have both “hot” and “cold” wallets. The safest process is to keep most of your money in cold wallets and use hot wallets for daily transactions. Cyber-attacks usually target hot wallets because large amounts are available in hot wallets. So it is safe to keep only that amount which is needed.
Cold Wallet
Cold wallets are not connected to the internet, and they are kept in cold storage. This wallet is more secure because your crypto money is not stored online, so it can’t be hacked. Whereas, to make transactions, you need to connect your cold wallet to the internet. A cold wallet needs to be stored in a secure place.
Why is Crypto Security Necessary?
Searching for the best cryptocurrency security measures has increased rapidly recently because of the increasing number of cyber-attacks. As cryptocurrency is becoming popular, it is becoming more vulnerable to malicious attacks. Cyber-attacks are becoming huge, and hackers are trying new ways to hack crypto exchanges.
Cryptocurrency security concern is necessary because the amount of crypto being stolen is increasing per year. In recent reports, it is stated that investors have lost more than $225 million in different scams by cyber attackers. Therefore, it is necessary to implement crypto security measures. If you are an investor, then you need to be really serious about securing your assets.
Threats to Crypto Security
Cryptocurrency is a digital asset, and its security depends on how much you keep it safe. Your assets can be lost due to different reasons, which is a threat to crypto security. Here we are highlighting some of the common security issues which you need to know.
Private Key
Well, we can’t really say that private keys can be a threat to crypto security because their only role is to enable access to cryptocurrencies. Whereas the way you manage your private keys can be a security concern in the crypto domain. If you lose your private keys, it means you have lost your funds. And if you pass your private keys to someone, it means you are providing them access to your crypto assets.
Negligence in Security
A lot of people think of crypto security as a myth. They think that cryptocurrency is a secure version of digital currencies. Investors usually use simple passwords and out-of-date antivirus software, and they neglect important security measures like two-factor authentications.
Criminal Threats
There are a lot of threats to crypto security, but the most common is a criminal threat. Cybercriminals are implementing different technologies to make their strategies and tactics to cyber-attack people.
Ransomware attackers encrypt files on your system and then demand ransoms for a decryption key. Phishing attacks are also becoming common in the crypto market. They deceive investors with fake links. They pretend as a legitimate crypto organization and send emails. Suppose an investor opens this link. Hackers get full access to their crypto assets.
Using Wi-Fi in a public place to use a crypto site is also dangerous, and a lot of investors ignore it. Hackers may find a way to get through your sensitive and private information regarding crypto. Cryptojacking is also a new hacking technique that uses the computing power of another PC that gives access to crypto mining.
Steps To Secure Cryptocurrency From Cyber Attacks
Cryptocurrency can become a profitable investment if it is done in the right way. Also, having detailed information and research about crypto helps a lot in better trading. Crypto security measures must be applied, and also some other steps need to be taken to prevent a cyber attack
- Try not to store cryptocurrencies in digital storages.
- Don’t make transactions using public Wi-Fi.
- Don’t share your private wallet keys and passwords with anyone.
- Keep cryptocurrency private.
- Create a unique and complex password.
- Keep your crypto assets private.
- Use 2-factor authentication for better security.
- Don’t install any unsecured app to keep the security level high.
- Use a private internet connection.
- Buy a cryptocurrency hardware wallet.
- Avoid bitcoin gambling websites.
Cyber attacks have increased a lot. Therefore, it is necessary to implement these basic steps to avoid any cyber scams.
Cryptocurrency Security Standards
Cryptocurrency Security Standards (CCSS) is synchronization of security requirements for the systems that use cryptocurrencies. It can be applied on crypto exchanges and also too mobile and web applications that are used to access cryptocurrencies. Brief information on crypto security standards provides better prospects to secure cryptocurrencies. This process helps organizations to apply techniques and different methods to a specific system for security.
CCSS allows the end-users to make smart decisions and the best choices to invest and purchase in the right currency. It also helps customers to make good decisions when they are allying with authorities. The best thing about the CCSS is that it is a guided step-by-step process with ten different steps to ensure security in cryptocurrency. These ten steps are applied in 3 levels. Therefore, these standards are used widely by different cryptocurrency exchanges.
These are the following steps that Blockchain technology and organizations follow to secure assets. It is necessary that investors must invest in crypto by following Cryptocurrency Security Standards:
- Creation of private key
- Crypto wallet creation
- Securing key storages
- Key usage
- Outlined key compromise policies
- Revoke policies and procedures of key holders
- Audits from third-party
- Policies of data scrutiny
- Proofs of reserve
- Audits of transaction logs
Crypto Security Measures
The continuous increase in interest in cryptocurrencies has made it necessary to give attention to the security of cryptocurrencies. Cryptocurrency uses Blockchain technology, and investors use this digital technology to make transactions and buy goods and services. Therefore, it is important to secure assets by implementing security measures. Here, we are discussing the major security measures you can make in order to protect your assets.
Research on Trustworthy Crypto Exchanges
One of the most crucial parts of crypto security measures is proper research on crypto exchanges. Researching is the first step before investing time and money in crypto exchanges.
To access cryptocurrencies, crypto exchange is the first place people go for. There are various crypto exchanges in the market where you can buy or sell. So it is important to make the necessary effort to do research before investing your assets in cryptocurrency.
Therefore, if you are planning to start trading in cryptocurrency, consult any crypto advisors or do your own research. Invest some time and effort in understanding more about crypto exchanges and their features. Make a detailed investigation about crypto exchanges. You can also check reviews of every crypto exchange and even contact some experienced investors or traders. After you get proper information, then make a decision accordingly.
Choose the Right Wallet
Another important step in solving cryptocurrency issues is choosing the right wallet. A crypto wallet is an important tool for managing private keys. Every crypto wallet has its own features, technology, and standards.
Hence, it is necessary that you choose an ideal wallet after gathering information about its features, advantages, and security standards. You must have to do trade in cryptocurrency with authentic wallets, apps, and exchanges. Do not invest your money without proper research. Always invest in wallets and exchanges that follow cryptocurrency security standards.
Creating Complex Passwords
Creating a secure password is necessary so that no one else can access your crypto assets. It is equally important to secure your password because, without it, you can lose your crypto. As the popularity of cryptocurrency is increasing, the number of cyber theft and scams is also increasing. New crypto investors are the easiest target for hackers.
Therefore, it is important for investors and crypto holders to understand the importance of strong password security so that they don’t become a victim. The first step of defense has a strong password. Hackers have a lot of hacking tools. They can easily crack weak passwords with the help of malicious software. It will be harder for a hacker to crack if the password is long and complex. Your password should always be complex, whether it is a crypto exchange or a wallet.
Connecting your same email and password to crypto and other social media accounts like LinkedIn or Facebook is not a good option. Hackers can purchase this data from the dark web and can use your information to access your crypto exchanges. Therefore, it is highly recommended that you should use a different email and password from crypto that is not connected to any other server on the internet.
Using Hybrid Strategy
A detailed understanding of crypto wallets helps you understand the security measures of cryptocurrency, and it helps you to secure crypto assets. It is wise to use a hybrid strategy for crypto wallets. Most online wallets are gaining popularity, and no doubt, they are a good investment option. But it has also gathered the attention of hackers.
Therefore, it is a good option that you must keep most of your crypto assets in cold wallets offline and just put a little money in a hot wallet online, which is needed for transactions.
Some of the other ways with which you can secure your crypto are as follows:
- A cold wallet is better for saving assets because it is not connected to the internet.
- Change your password after a few months.
- Keep your keys private with security.
- Frequently update your device with the latest software.
- Avoid phishing emails.
- Try to keep multiple wallets.
- Use a secured internet connection.
- Download antivirus to keep your phone safe from viruses.
Conclusion
Understanding the procedure of trading cryptocurrency securely is very important if you want to gain profit from trading. Cryptocurrencies are already secure, but it is still vulnerable. Therefore, it is important to implement high-security measures to protect crypto assets.
Crypto Comeback Pro is a crypto trading tool for investing in the crypto market with an %88 average win rate on trades and is the #1 trading software for crypto traders from all around the globe in 2022. Try it For FREE Today. (Ad)
