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The crypto industry is attracting new investors at an unprecedented rate; with that comes hacking risks. The rise of the industry has opened opportunities for cybercriminals to find loopholes in blockchain and scam millions of users. According to a report on "Cryptocurrency Anti-Money Laundering (AML)" by CipherTrace, worldwide cryptocurrency crimes hit up to $4.3 billion in 2019. It is estimated that between January and July 2021, around $650 million have been targeted in matters of theft, hacking and fraud. The threat to digital currencies mainly comes through cryptocurrency wallets (digital wallets) or exchange providers.
Here are a few tips:
Every investor should invest a reasonable amount of time researching the digital asset or crypto they plan to invest in. Investors can start by looking through the crypto's official website, learning about its founders and developers. These details should provide an insight into whether the project is doubtful or not.
Cold wallets are not like hot wallets; they do not connect to the internet; hence they are not prone to cyber-attacks. Also known as hardware wallets, cold wallets can store their user's private keys as they come encrypted, proving the most viable option.
Do not fall for imposter websites; a significant number of imposter websites are being set up to resemble the official websites. Amateur investors might not differentiate between fake and real ones; hence one should take advice from industry experts. Always be aware of phishing emails.
While making crypto transactions or trading, only use a safe and secure internet connection; avoid using public Wi-Fi networks. Access your home network using a VPN for additional security. A VPN changes the location and address, keeping the browsing activity safe from threats.
Always download crypto trading or exchange apps from verified sources. Scammers can trick investors through fake apps, look for spelling mistakes or alterations in logos. Although these counterfeit apps are removed when identified, it's always good to be on the safer side.
Users can continuously diversify their cryptocurrency investments by using multiple wallets. Investors can use a separate wallet for daily transactions and others for the rest of their assets; this will protect the user's portfolio and mitigate the losses in case of breach into their crypto accounts.
Smart contracts are technical codes that follow a set of instructions. They usually help users understand the potential of a particular crypto project. If there is some issue with the smart contracts, there might be weaknesses within the project.
The significance of a strong password cannot be undermined. According to a study, around three-quarters of the US Millenials use the same password on more than ten different apps, devices and other social media platforms. Therefore always use a complex and strong password.
The cryptocurrency industry is and will keep involved constantly; it's always the user's responsibility to protect and secure their digital assets.