When Bitcoin was launched as the first cryptocurrency, developers were optimistic about finding a way to counter the distrust from centralized entities. Bitcoin was particularly developed from the need to create new systems after a distrust from traditional markets. However, the system has become vulnerable to high tech cybercriminals who target and steal crypto assets.
Security risks that come with trading and storing cryptocurrencies
Lack of consumer protection
Cryptocurrency does not offer any consumer protection for storing and trading cryptocurrencies. For example, once a transaction has been done, it cannot be undone. This means a user cannot get the coins back if they erroneously send Bitcoin to the wrong recipient. At the same time, there is no mediator in Bitcoin transactions that can protect users. The irreversibility of these transactions means an investor can lose his digital fortune with a single error.
Malware and phishing have been on the rise during the Covid-19 pandemic as cybercriminals take advantage of people’s anxiety. The criminals are sending phishing emails to individuals to lure them to click on certain attachments. As a user clicks on the link, the attacker gets access to the digital wallet.
How to stay protected from cybersecurity risks
Use strong passwords
Weak passwords increase the risks of cyber-attack since hackers can easily access digital wallets. Strong passwords keep the system secure by ensuring the hacker cannot guess any combination. For example, using a combination of upper and lower cases, symbols, and numbers makes your password and account more secure.
Enable multi-factor authentication
Multi-factor authentication adds an extra layer of protection that prevents unauthorized access to systems and your accounts. Users employ two or more distinct forms of identification to strengthen the security of their account and money. In other words, apart from your username and password, you will also need another authentication PIN when you log in to your account.
Use trusted secure networks when accessing a digital wallet
Your crypto asset will be exposed if you use a public Wi-Fi network to trade cryptocurrencies. Therefore, cryptocurrency users can protect their digital wallets by using trusted networks to avoid malware that will redirect funds somewhere else. It is also better to transact cryptocurrencies on an exclusive device that doesn’t share any other account.
Use a VPN
Crypto users should consider using a Virtual Private Network . A simple VPN download can encrypt your online activity and ensure privacy when you trade. With this app, users can transact securely in the private tunnel between their device and the internet. Moreover, a VPN changes your IP address and prevents persistent IP tracking.
The technology that supports cryptocurrency has been designed to be secure. However, storing and trading in cryptocurrency is not protected by the blockchain, which means there are many risks involved in the process. The current coronavirus pandemic has heightened these security risks for cryptocurrency trading. Therefore, any Bitcoin investor needs to understand the risks and take appropriate measures to ensure the online wallet is safe and secure.