Dabbling in cryptocurrency trading will always come with inherent risks. The volatility of each coin is a significant risk in and of its own, but there are many ways to lose your assets besides making an ill-timed trade. Even when blockchain technology is incredibly difficult to hack, there are many ways that cybercriminals can gain access to your crypto assets.
Since blockchain operates on a decentralized system, it does not offer the same level of money protection as that of a bank or digital wallet. Whether you’re new to crypto trading, or if you’re a seasoned veteran, here are the security habits that you should never forget.
Always Do a Background Check On Exchanges Before Investing
Not all exchanges are safe. In fact, some exchanges have committed fraud against their users. It’s because of this that it’s important to do your due diligence on a particular exchange before investing a single dollar with them. In fact, you should take this with the same level of vigilance as you would with an ICO review.
There is always a constant risk of hacking, and some exchanges are more susceptible than others. Some exchanges even commit fraud themselves. If you’re unsure of the security of an exchange (but have no other choice than to use it), make sure to move your assets out of the exchange when not in use.
Invest in Both Digital and Physical Wallets
Online wallets are becoming increasingly popular, especially with the advent of NFTs and P2E crypto games. This boom in interest naturally attracts hackers who have the capability to exploit vulnerabilities in digital wallets either through sheer hacking skill or through phishing.
Since there is a constant hacking risk, it’s important that you store the majority of your crypto assets in a physical wallet, while only a small amount should be left in your digital wallet. This way, even when your digital wallet gets compromised, the majority of your assets are still secure.
Never Use the Same Password for Multiple Accounts
While this should be taken as a basic security measure, far too many people still neglect to diversify their passwords. Even when you have a strong password, there’s always a chance that a data breach could occur.
Using one password for all your logins means that if one login gets compromised, so too will all other logins. You might want to consider using a password manager.
Use Cold Storage for Your Secret Key
Every novice cryptotrader ought to know that you should never share your secret key, seed phrase, or recovery with anyone as this will give whoever has it full access to your digital wallet. Using cold storage for your assets entails printing and securing your secret key and erasing all its digital traces. Cybercriminals can’t exploit something that’s offline and physical. Always keep your secret phrase in a vault to protect it from theft or destruction.
Dabbling in cryptocurrency is inherently risky, and with the sudden increase with the popularity of crypto, hackers will no doubt be looking to defraud novice crypto traders. These are the golden habits that every trader must observe in order to prevent hackers from stealing their assets.
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