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With global inflation, rising prices of cryptocurrencies, and growing distrust towards centralized systems, people are turning to decentralized finances and beginning to consider investing in crypto assets. Nevertheless, for many, crypto security is a big concern, which is exactly why it is so important to talk about methods of maximizing crypto security for investors. In our article, you will learn more about methods of protecting your crypto investments to enjoy their rising prices in peace, unbothered by security concerns.
Disclaimer: This article is created for educational purposes only.
The emergence of cryptocurrencies created brand-new opportunities for investors are all around the world, but since crypto investments do not fall under the category of regular assets, many people have concerns regarding their security. There are many misconceptions regarding crypto security, and some of them are based on prejudices against cryptocurrencies. Let us go through the main methods of maximizing crypto security and typical crypto threats.
In this article, you will learn about…
- common crypto security threats
- cryptocurrency scams to beware
- ways to maximize crypto security
- portfolio diversification
What are the most common crypto security threats? One of the most common crypto crimes is connected to ransomware: the use of malware, which holds one’s data to “ransom” until a victim pays to regain access to their device. In 2020, ransomware victims paid $350 million worth of cryptocurrency to ransomware criminals (Chainalysis). Additionally, hacks and non-technical attacks cost crypto users all around the world more than $520 million in 2020 (Chainalysis). Many of them could have been avoided if the right security procedures had been used. Here is a shortlist of common crypto security threats to avoid:
- using public Wi-Fi networks to access your digital wallets
- allocating all money on one exchange
- failing to prepare physical copies of wallet keys
- clicking on unsafe e-mail links
- keeping cryptocurrency only on a local storage
What are typical crypto scams that cost people money and nerves? Hackers and crypto criminals look for convenient ways to trick people and gain access to their digital wallets, so they create imposter websites, which resemble trustworthy companies. Normally, they would include a fake URL created to scam you: rather than paying for your alleged crypto assets, you would send money straight into scammers’ accounts. Very often, it is easy to overlook small details that expose fake websites, but the lack of an SSL certificate could be the first red flag. A trustworthy website will always meet high-security standards.
Cyber threats are everywhere: people are regularly scammed on fake cryptocurrency apps, which appear in Google Store or Apple App store under catchy names. Before they get deleted by the administration, thousands of people download them to lose money and trust in crypto projects. If an app looks suspicious, it probably is. Beware of misspellings, unprofessional design, and vague descriptions — such apps are often created in a hurry to scam as many people as possible in the shortest period of time.
Last but not least: scamming e-mails are the digital world’s oldest trick. Did you get an e-mail from a respectable crypto company that looks suspicious? Double-check everything. Fake initial coin offerings (ICOs) or giveaways are very common ways to scam crypto investors. You click on a malicious website link and the next thing you know there is malicious ransomware on your computer. Caution is extra advised when it comes to crypto investments: their hype attracts many scammers, who only perfect their ways to leave with your funds.
How to maximize the security of your crypto assets?
The most important step to take before investing in cryptocurrencies is getting educated about different exchanges and their trustworthiness. You can read reviews, talk to people, or google until you get a general idea, which websites you should avoid. To maximize security, never keep your public and private key for your crypto deposit box together, and always choose wallets with high-security standards. A strong password is also a must: do not use the same password across many networks, and enable two-way verification. The weaker the password, the better target you are for hackers.
When it comes to investments, trust is the most limited currency, so avoid sharing wallet details with anyone. Storing all your cryptocurrency on online storage is tempting, but highly risky: offline wallets are safer. The security of your wallet is crucial, so it is smart to generate a unique address for every transaction you make and assign recovery keys to your wallets just in case things go wrong. You can also store your keys in different locations and require more than one signature to use money from your crypto wallet.
Diversify your portfolio
Diversifying your investments is a smart strategy, both in the digital and non-digital world. Do not put all your eggs in one basket: observe crypto trends and choose a few cryptocurrencies to invest in rather than putting all your money into one cryptocurrency. In the past month, both Ether and Bitcoin hit their all-time-high records, but Solana and Cardano have also shown a lot of promise, so diversifying your portfolio is definitely a good idea.
Short summary
- Ransomware and hacks are the most typical crypto crimes
- Beware of fake websites and apps, which are copies of trustworthy websites
- Always choose wallets with high standards of security
- Double-check your e-mails: there are many fake ICOs that you should never click on
- Keep your wallet keys confidential and never store them in the same location
- Use unique addresses for every transaction
- Research your cryptocurrency exchange
- Require multiple signatures to spend funds from your digital wallet
- Offline wallets are safer than online wallets
- Diversify your portfolio to avoid potential losses
Maximized crypto security for investors? With ZB, everything is possible. The Crypto future is within your grasp, so start trading with Zb.com!
