One of the biggest positives when it comes to cryptocurrency is the inherently high level of security that is associated with the blockchain technology on which it is built. It is practically impossible to hack in the conventional sense of the term, as to do so would require immense computational capacity. Aside from the practical difficulties, that means that even attempting to do so just wouldn’t be worthwhile.
However, this can lull traders, and especially those who are new to trading, into a false sense of security. Despite the nature of blockchain, cryptocurrency theft does occur. Invariably, this is not due to technological shortcomings, but rather those of human nature. Here are some simple measures you can take to trade crypto safely and securely.
Protect your phone
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The most secure software in the world won’t help you if you don’t follow common sense. This is the mobile age, and as well as using smartphones for surfing the internet, using social media and checking email, a growing proportion of traders use software like the Bitcoin Revolution app to do their trading on the go. Keep your handset on you at all times, and make sure the screen automatically locks when not in use. Also, update passwords from the factory default and use fingerprint or retina security when available.
Watch out for phishing scams
Hackers have had to get smarter, and one of the most common crypto scams is phishing. This involves sending you an email that purports to be from your exchange or wallet, directing you to a site where you need provide your login details. They will provide some plausible-sounding reason for this and it is easy to be taken in. Always treat any such email with suspicion, check the link that has been sent and if you are in the slightest doubt, log on by conventional means and check whether the message is genuine from there.
Don’t be fooled by pump and dumps
Once the domain of the securities fraudsters, the Wall Street Journal confirmed the rumors that the pump and dump phenomenon is starting to infiltrate the crypto markets. This is a completely illegal practice in which a well-orchestrated team of fraudsters and influencers generate hype around a specific altcoin and large numbers of people to buy it at the same time. This leads to an astronomical rise in value, whereupon the organizers dump all their stocks and make off with the money, leaving their victims with empty wallets and worthless digital stock. Check out the ChainCoin saga for a perfect example.
Buy a hardware wallet
There are numerous choices out there when it comes to selecting a crypto wallet, and this is a topic that is discussed at length elsewhere. However, from a safety and security perspective, there is really no substitute for a hardware wallet. This stores the user’s private keys within its own circuit and even comes with a physical seed – a paper document that will allow the user to transfer keys away from the wallet in the event that it is lost or stolen.