Security Risks of Cryptocurrencies and How to Stay Safe

Cryptocurrency is not new, and it has taken the world quite some time to embrace it. However, the trend is catching on fast, and with this improvement comes security risks. Cryptocurrency is a virtual or digital currency made secure by the use of cryptography, making it impossible to double-spend or counterfeit, and almost unhackable. The keyword here is ALMOST, and some cunning cyber-criminals have learned how to beat the system and steal from investors.

●       Crypto-ransomware

Crypto-ransomware is a malware that encrypts files on your mobile device or computer to extort money. The encrypted files are scrambled and unreadable, meaning you cannot access your crypto-files. The criminals send you a ‘ransom’ message asking you to pay them an amount of money in cryptocurrency in exchange for the decryption key to your files.

●       Crypto-jacking

Cryptojacking is defined as the unauthorized and illegal use of other people’s computers to mine cryptocurrency. Hackers manage this by sending the victim an email with a malicious link. Once you click on the malicious link, it releases the crypto mining code into the computer. The crypto mining code might also infect an online ad or website with JavaScript code, which auto-executes the minute it loads on your browser.

●       Data breaches

Data breaches occur when malicious actors manage to gain confidential records and leak them to the public. A cryptocurrency wallet provider, Ledger, faced a breach in June and July 2020. The breach affected the email addresses of close to a million individuals, and for some, details like both names, phone numbers, and postal addresses were exposed. A third party with authority carried out this breach by using an API key for accessing the e-commerce and marketing database used by the company to send out promotional emails.

How to stay protected

You can easily protect yourself using several methods such as:

1.      Install a VPN

A VPN (Virtual Private Network) plays a significant role in encrypting all your communication. The app provides you with a virtual location by hiding your exact location and your IP address. If you use your mobile phone to access your cryptocurrency wallet while on the go, a VPN app will work to ensure hackers do not intercept your emails.

2.      Subscribe to a secure email service

To protect your emails and other personal data, subscribing to secure email service is an excellent option. A secure email service provider offers some benefits, which improve your security, such as:

  • Security restrictions
  • Confidentiality
  • End to end encryption

3.      Use multi-signature addresses

Multi-signature addresses or multisig are permission slips allowing you to carry out digital transactions to mitigate fraud incidences. Multisig addresses are configurations that use two, three, or more keys to authorize all transactions. This means getting other parties on board to hold the other keys. The good news is that the other parties cannot access your funds if they decide to steal from you.

4.      Use a strong password for your online wallet.

Be very careful when using an online wallet, and choose your password wisely. Do not use obvious choices such as children’s names, birth dates, pet names, etc. Use alphanumeric combinations that nobody can guess. Ensure the password is unique and easy for you to remember.

5.      Do not share private keys

Your private keys are for your use only. Do not share the keys with any person and never ask anyone to make a transaction on your behalf. If any third party asks you to share your private key, ignore the requests.

Conclusion

As much as cryptocurrency is secure, it has some risks as well. Cyber-criminals are very cunning and use any trick and software to steal your funds. Just because cryptocurrency is unhackable does not mean it is impossible, and taking precautions is the way to go to ensure you keep your crypto wallet safe.

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