Since 2009 when Bitcoin was introduced to the world, cryptocurrencies have gained value, and today their market capitalization exceeds US$800 billion, experts predict that we will continue to see an increase in the value of cryptocurrencies.
While this is welcome news for cryptocurrency traders, hackers looking to get a piece of the pie disrupted the market, stealing users’ logins and funds in 2019, with investors losing $292,665,886 million worth of cryptocurrencies.
Security breaches are on the rise, fueling the need for cryptocurrency traders to take extra precautions when using exchanges and storing their cryptocurrencies.
Before we look at the security practices you can use to keep your digital wallet safe and secure, let’s talk about some security risks.
What are the security risks?
Here are three security risks that cryptocurrency traders face:
Play the role of an investor
Scammers posing as cryptocurrency traders or exchanges demanding high returns on cryptocurrencies have scammed unsuspecting victims.
Scammers use social media and emails to target users, and Bitcoin is the dominant cryptocurrency on the market; It was also the cryptocurrency most exploited by scammers.
Phishing
Emails claiming to come from legitimate sources such as charities and government agencies are on the rise. These phishing scams encourage people to click on links to donate or purchase personal protective equipment.
These links take people to malicious sites, where personal information, including private keys to cryptocurrency exchanges, could be exposed to hackers.
Ransomware
Using ransomware, the malware encrypts your system and files and then demands a ransom to return or decrypt the files. Some ransomware requests payment in cryptocurrency.
5 ways to protect your Cryptocurrency Wallet
Despite these security risks, cryptocurrency wallets remain one of the best options for securing your cryptocurrencies, so how can you protect your wallet from malicious activity? Here are five ways:
1. Use a reliable password manager
It can be difficult to remember your private key code, which gives you access to your encrypted wallet. This is a security tactic, so rest easy by using a reliable password manager to store and retrieve your keys. This means you won’t have to worry about forgetting your private keys and locking out your wallet.
2. Download VPN
Applying a virtual private network (VPN) is another way to enhance your security. A VPN can encrypt your online connection, preventing hackers from monitoring cryptocurrency exchanges. Many cryptocurrency traders use this tool to ensure their anonymity online.
3. Use two wallets
Consider keeping a small amount of cryptocurrencies in your online wallet for trading purposes and keep the rest in an offline wallet.
This way, if malware tries to intercept your online wallet password, the rest of your funds will be safe and stored out of hackers’ reach.
4. Use two-factor authentication
Instead of using just one password to access your encrypted wallet, two-factor authentication enhances your security by requiring an additional code. The code can be sent to your phone as a text or email and is only valid for a few minutes.
5. Update your device software and antivirus software
One of the best ways to strengthen your device’s protection and reduce vulnerabilities is to regularly update your software and antivirus application, as these regular updates remove vulnerabilities.
