Although the term “cryptocurrency” just might come off as unfamiliar to some people, terms like Bitcoin, Ethereum, and Litecoin shouldn’t. Since the birth of Bitcoin in 2009 and its remarkable bull-run in December 2017, cryptocurrencies have become a force to reckon within the financial world.
Day-in, day-out, several cryptocurrencies are springing up, each having their different utility use. One of the primary reasons for the popularity and adoption of these financial instruments is their autonomous operation without regulation from institutions like banks or governments.
The Blockchain technology, upon which most of these cryptocurrencies operate, provides transparency for every transaction performed on the network. Apart from this, every transaction is immutable – meaning it’s “smart contract” cannot be altered by anyone.
Attractive Prey for Cybercriminals
Cryptocurrency has since garnered enough media coverage and gained massive publicity. However, as with anything that runs on the Internet, it has its woes. Its direct relations with finance makes it a juicy target for cybercriminals. In 2019 alone, cyberattacks ran businesses and individuals into losses of over 4 billion US dollars, with insider theft being the major offenders in the scheme.
However, scary this might seem, having a good knowledge of the risks associated with cryptocurrencies will go a long way in staying safe. Explained below are a couple of them:
- Unregulated Cryptocurrency Exchanges: Because quite a number of cryptocurrencies are decentralized, the consistency of which these exchanges are regulated, if any, is quite little. For the ones that aren’t regulated at all, there is a very high possibility that they might falter in some areas concerning security and probably insurance of customer’s funds – making them risky to trade on. Often, these kinds of exchanges come with incentives that make users overlook these shortcomings.
- Unsecure Passwords: This is a common issue faced by users, and this is often addressed by many website owners. The recommendation of how a typical password should be are eight characters long, a mix of alphanumeric characters – both capital and small letters and a combination of special characters. It is also a good rule of thumb to avoid using passwords that are also used on other accounts.
- Phishing and Social Engineering: Although not peculiar to cryptocurrency alone, this is one of the many ways by which hackers gain access to users’ information. They send emails, campaigns, or adverts from “make-believe” sources to unsuspecting users, directing them to enter their sensitive details on a website that is made to look like the actual one, thereby stealing their data.
Tips for Cryptocurrency Owners
Understanding the risks involved in using cryptocurrency but a working knowledge of how to stay above these risks is also crucial. Detailed below are a couple of them:
- Enabling Two-Factor Authorization: Two-Factor Authorization, sometimes referred to as 2FA, is a feature that allows website users to secure their account with an additional layer of security asides password enablement. This works by sending a One Time Password (OTP) to the phone number or email address registered to the account once anyone tries to log in to the account. This way, there can be a protection against unauthorized access.
- Using Encryption Services: Public WiFi has consistently been deemed unfit for use because of its security implications. Some people still find situations, where they have to perform transactions on the go, and their only option is to use public WiFi. In this scenario, it is often advisable to use a VPN to encrypt the network data traveling to and from the network. This is in a bit to avoid the interception of sensitive data by hackers and malicious elements.
- Using Password Managers: These are forms of digital vaults that securely store the passwords used on several websites, so you do not have to repeat them. They also help recommend highly complex and almost “uncrackable” passwords to improve account security. While a number of these password managers have paid features, there are several of them that offer free features providing you with a myriad of options to choose from depending on your budget and needs.
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