Mining, trading, and investing in cryptocurrency have had an upward trend recently. You can hardly spend a day on the internet without encountering crypto-related content. If you are interested in an industry with luxurious deals, you may try virtual trading. However, keep in mind that not everyone on the internet is there to help you achieve your financial objectives. Trading, storing, and finding a suitable asset to trust with your investments has its challenges. So, is cryptocurrency trading safe? If you are a newbie in the crypto space, you have to understand the related risks. To aid you through your trading journey, read this security-related article. That will help you minimize risks when in your cryptocurrency activities.
It is with no doubt that you can never tell what the crypto market has for you each day. Will cryptocurrencies replace traditional currencies? Or is it just a fraction of what the future economy will demand? Moreover, is trading digital coins safe? As much as you do not have to trust anyone in the crypto industry, you will accept that cryptocurrency is here to stay. More companies are now accepting crypto payments for their services and products.
Is Blockchain Safe?
Cryptocurrencies use computer codes as their monetary units. Developers encrypt the codes to manage the asset and prevent cases of counterfeiting. Blockchain is a programmable registry that stores the crypto codes in many copies.
Some of the popular cryptocurrencies you will find in the trading market include Ethereum (with a current market cap of $40 billion), Bitcoin ($200 billion), Bitcoin Cash ($4 billion), and Ripple ($11 billion). Blockchain technology performs like a bank, storing the coins and recording transactions.
The blockchain software links multiple computers via a peer-to-peer network. That makes it hard for criminals to tamper with the system. Blockchain and decentralization encryption prevents hackers from accessing your cryptocurrencies.
General Crypto Risks
How safe are you when trading cryptocurrencies? What are some of the main cryptocurrency-related risks? In this case, we will not discuss risks related to your lack of control in the crypto market. Instead, you will learn some of the crypto elements that hackers target most.
1. Crypto Exchanges Attack
Crypto exchanges are platforms that you can use to exchange, sell or buy cryptocurrencies. You require an exchange to handle all your crypto dealings, from executing your trades to withdrawing your profits. Exchange platforms use various ways to ensure that you are safe when investing. However, despite the security measure, crypto trading remains vulnerable to hacking activities. On July 17, attackers accessed the Bithumb platform and stole BTCs. To facilitate that, the criminals retrieved user data from a Bithumb employee’s PC. They then utilized the stolen data to launch an attack through social engineering.
Criminals also attacked the Kucoin brokerage firm in 2020 September. Investors lost over $200 million worth of cryptocurrencies with the scam.
2. Wallet Security
To hold your digital coins, you will need a cryptocurrency wallet, which differs from an electronic one. While you can use electronic wallets to store digital types of bank cards, credit cards, and other payment options, the crypto wallet is software that contains both your private and public encryption keys. You will require your cryptocurrency wallet to facilitate blockchain transactions and track your available tokens.
A crypto wallet acts as your bank when in the crypto market. For that reason, you have to protect your log-in data against criminals. Any mistake to leak your password might mean losing your investments. However, fraudsters can still access your log-in info using malicious apps, phishing, spyware, and other attack methods.
Cryptocurrency proves to be a sound investment with the many fortunes it earns investors every year. Do you want to try your luck in this booming market? Well, you may have to beware of the related risks. Cyberattack remains the biggest challenge in the crypto industry. Scammers will utilize as many ways as they can to steal your info or money.