Since 2009 when the world was introduced to Bitcoin, cryptocurrencies have gained in value and traders. Today, the market capitalization is over US$300 billion, and experts predict we will continue to see an increase in the value of cryptocurrencies. While this is welcoming news for crypto traders, hackers looking to get a piece of the pie disrupted the market, stealing user logins and their funds. In 2019, investors lost $292,665,886 million worth of cryptocurrency. Security breaches are on the rise, fueling crypto traders’ need to take extra precautions when using exchanges and storing their cryptocurrencies. Before we look at the safety practices you can use to keep your crypto wallet safe and secure, let’s talk about some security risks.
Hackers are leveraging COVID-19 to exploit individuals. Online security risk surged in the early stages of the pandemic, with malicious attempts becoming more sophisticated. Unfortunately, the crypto market has not been spared from these attacks. The following are three security risks crypto traders are faced with:
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Scammers posing as crypto traders or exchanges claiming high returns on cryptocurrencies have tricked unsuspecting victims. The scammers use social media and emails to target users. Bitcoin is the dominant cryptocurrency on the market; it has been the most exploited digital currency for scammers.
Emails claiming to come from legitimate sources such as charities and government agencies are increasing during the pandemic. Using COVID-19 as a cover-up, these phishing scams encourage persons to click on links to donate or purchase personal protective equipment. These links take persons to malicious sites where personal information can be exposed to hackers, including private keys for crypto exchanges.
With ransomware, a malicious program encrypts your system and files, then asks for a ransom to return or decrypt the files. Some ransomware programs request payment in cryptocurrency.
Despite these security risks, crypto wallets remain one of the best options to secure your cryptocurrencies. How can you protect your wallet from malicious activities? Here are five ways:
Use a reliable password manager
The code for your private keys, which gives you access to your crypto wallet, can be challenging to remember. That is a security tactic. Rest easy by using a reliable password manager to store and retrieve your code. This means you will not have to worry about forgetting your private keys and being locked out of your wallet.
Download a VPN
A Virtual Private Network (VPN) app is another way to strengthen your security. A VPN can encrypt your online connection, blocking hackers from monitoring your crypto exchanges. Many crypto traders use this tool to ensure their anonymity online.
Use two wallets
Consider keeping a small amount of cryptocurrency in your online wallet for trading purposes and keeping the rest in an offline wallet or ‘cold storage.’ That way, if malware tries to intercept your password for your online wallet, the rest of your funds are safely stored on a hard drive, USB, or paper and out of hackers’ reach.
Use two-factor authentication
Instead of using only one password to access your crypto wallet, two-factor authentication bolsters your security by requiring an additional code. The code can be sent to your phone as a text or an email and is only valid for a few minutes.
Update device software and antivirus
One of the best ways to fortify your device to reduce vulnerabilities is regularly updating the software and antivirus solution. These regular updates remove vulnerabilities as soon as they appear to keep your device safe from malware attacks.
While you enjoy the delights of being a crypto owner, there are security risks that can make your crypto wallet volatile. This is why you should employ the right security measures to avoid security breaches. The tips provided will improve your online security and help protect your crypto wallet.