Perhaps because of the popularity of crypto or the abundance of novice users- crypto scams and hacks are something we should all be watching out for.
Bitcoin is definitely something that is starting to appear on Christmas lists this year. To say that the famous crypto has become mainstream does the coin little justice. People from all over the world are still clamoring to invest in digital assets, particularly with respect to the market’s fantastic performance this year.
While exchange platforms like Bitvavo can make it incredibly easy for even the least computer literate to invest in bitcoins ever-increasing potential- there are still security risks that every user must be aware of. So, for institutional and retail investors alike- it’s always important to know how to best protect your crypto assets.
Scams, while not necessarily technologically complicated, still seem to catch the best of us at the worst times. Keeping yourself free from falling prey to the varied, and reasonably clever, crypto scams isn’t actually all that difficult- but it does take some good-natured skepticism and a bit of research. Essentially the absolute most foolproof way to avoid these types of scams is to always do your research. Before you invest in any type of crypto technology or asset, make sure you give their white paper a thorough read through.
There are essentially four types of scams that are most often associated with crypto loss and insecurity:
- Imposter Websites
- Fake Mobile Apps
- Bogus Social Media Ploys
While nearly all of these things seem like they would be incredibly easy to dodge without much effort- keep in mind these types of hacks are responsible for hundreds of thousands of lost bitcoins. Before ever plugging in your wallet details to an unknown website, app, or social media shout out, make sure you perform due diligence and check into the finer details and T&Cs where applicable.
Store With Security in Mind
There are a number of different ways in which to store bitcoin, however, most retail investors seem to be happy to go with whatever wallet their exchange offers them- or the wallet that comes highly recommended by the first crypto blog post they read. When choosing a wallet, make sure that you pay attention to the overall functionality of the software, and ensure that the website and associated URL are legitimate.
Once you have a crypto wallet, it’s time to start seriously considering cold storage- especially if you plan on HODLing, or hold more bitcoin than you regularly exchange. Cold storage is a term that refers to storing your crypto cache in a hardware or software wallet that can easily be disconnected from any online activity. Hardware wallets- like USB sticks or removable drives, are usually the most secure options for cold storage. Hot storage is when you place bitcoin into a wallet that is connected to an exchange, mobile app, or website. Constantly maintaining an active connection to the internet. Hot storage is best used with small amounts of crypto that you plan on transacting. Whether that be day trading or use to purchase goods or services.
New security risks, scams, and hacks pop up every day, so it’s important to stay current with the latest crypto news and reports, even if you’re not actively investing or transacting. It’s also important to maintain that healthy skepticism noted above any time you’re using a personal computer that is connected with your bitcoin wallet.
Don’t use a shared computer to store crypto, and never click on links in emails or messages that haven’t been verified. This is because there are some types of malware called “keyloggers” in which hackers will run a program that logs your keystrokes, making it simple to obtain sensitive login information and even the private keys to your crypto kingdom. Because of this, and the millions of other types of computer viruses and malware, you’ll also need to make sure that you regularly update your browser and take advantage of any computer security system updates or operating system updates.
Many of these tips don’t solely apply to bitcoin, either. Most are just best practices for anytime you access the internet via a machine that contains any personal or important data. As a final note- always remember to regularly back up your wallet- if not your entire hard drive. This ensures that should anything go wrong (and it probably will at some point) that you’ll have clean and uncorrupted data to fall back on.