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the ecosystem surrounding cryptocurrencies is expanding quickly, and in addition to the fantastic ideas and money being generated, fraud and hacking are also becoming more commonplace in the sector. with so much at stake, taking as many precautions as possible to protect your cryptocurrency investments is essential.
when a cryptocurrency account is compromised, investors have no legal recourse because cryptocurrencies are not yet regulated by a government or central bank.
there are, fortunately, measures you can take to protect your cryptocurrency investments from fraud, theft, and other security threats. by adhering to the following best practices, you can safeguard your assets and continue investing more confidently.
top eight guidelines for protecting your cryptocurrency investments
these easy-to-implement strategies can prevent your wallet from being compromised and your funds from being wiped out:
regularly update and alter your password pay heed to data breaches avoid utilizing wallets hosted by service providers be wary of phishing communications ensure regular updates of current versions of your applications, software, and antivirus adopt a hybrid strategy for digital wallet security utilize trustworthy cryptocurrency wallets, exchanges, brokerages, and mobile applications never use public wifi
1. regularly update and alter your password
only your password prevents a hacker from swiping your cryptocurrency. every 60-90 days, you should change the credentials for your wallet and accounts. use a different password for multiple accounts, particularly considering cryptocurrency services are prime targets for hackers.
most security experts recommend using unique passwords for all your accounts, including email and social media. using the same password or passwords similar for all your online accounts and applications leaves you highly vulnerable to cyberattacks.
avoid including crypto-related terms or personal data in your passwords (or email). suppose these passwords are exposed during a security lapse; attackers would easily gain access to your cryptocurrency wallet or account.
in addition, they may use the compromised email address and password to access your public social media accounts and obtain information about your parents, siblings, or significant other, as well as the answers to security questions used to reset your password.
finally, enable two-factor authentication for all online accounts and avoid saving credentials in your browser.
2. pay heed to data breaches
data breaches are more common than you might imagine. a data breach exposes sensitive, private, and confidential data to unauthorized parties, such as fraudsters and hackers. in 2022, more than 4,100 publicly disclosed data intrusions compromised nearly 22 billion personal records.
check to determine if your email address has been compromised.
if it appears that your email address and password have been compromised, it is prudent to assume the worst. change the compromised account's password immediately, and avoid using the same password for other accounts. this ties in with our first point: always use unique, robust passwords for each of your accounts to reduce the likelihood of hackers obtaining access to multiple accounts at once.
3. avoid utilizing wallets hosted by service providers
other bitcoin storage methods include wallets hosted on your laptop or desktop computer and wallets hosted by service providers. wallets hosted by providers are the worst option because you entrust them with your private key on servers you have no control over.
this option is the most popular because it requires the least amount of technical effort. it exposes your private key to several risks, such as a server compromise, the provider going out of business, or even a government or other legal entity seizing control of the infrastructure.
utilize a hardware wallet, a usb-based device that encrypts and stores your private key and all pertinent information. in comparison to other methods, the physical decryption technique is significantly safer.
4. be wary of phishing communications
scammers have created numerous websites that resemble those of legitimate companies. these sites are replicas that take your private data in order to hack into your cryptocurrency wallet and steal your assets. this is known as phishing , and it is one of the most common scams people fall for, not just in the cryptocurrency community but in all online transactions.
the operators of these fraudulent websites disseminate links to their websites via multiple channels, including social media, search engine advertisements, emails, and sms messages.
a phony website typically lacks the small lock icon and“https” that indicate the site is secure to visit and use. in addition, they frequently alter the url of the phony website by replacing“i” with“1” or“o” with“0”. for instance, a con artist could create a site with the url 0b1ex, knowing that it is identical to the original obiex site.
to avoid falling victim to crypto phishing schemes, double-check any url you enter into your browser and avoid clicking on links from untrusted websites, accounts, or emails.
5. ensure regular updates of current versions of your applications, software, and antivirus some people neglect their app and software updates until the app or computer forces them to. disregarding app and software updates can be detrimental to your cyber security. typically, each update includes a bug repair or security patch to safeguard your device against malware and other threats.
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configuring your computer to update software automatically and performing regular scans with your antivirus software to detect and eliminate any threats is advisable. you can also configure your phone to update apps automatically.
6. adopt a hybrid strategy for digital wallet security
the increasing prevalence of online wallets has attracted the attention of hackers. the majority of a consumer's cryptocurrency should be stored in offline or physical wallets, while only a tiny amount should be kept in an online wallet.
the physical wallet should also be kept in a safe or safety deposit box, with the private and public keys kept separate. when practicable, both should be protected with strong passwords and multi-factor authentication.
as cryptocurrency becomes more commonplace, more conventional options will emerge, but until then, it is your responsibility to safeguard your cryptocurrency.
7. utilize trustworthy cryptocurrency wallets, exchanges, brokerages, and mobile application
before deciding which platforms to use, investors should investigate the security features of each platform to determine how their data will be protected.
trustworthy entities should implement best security practices, such as requiring multi-factor authentication, ssl/tls encryption, and offline cryptocurrency storage on air-gapped devices.
using multiple cryptocurrency platforms can be safer so long as platform-specific credentials are unique and complex. whether utilizing one or numerous cryptocurrency platforms, using a secure password manager is essential to prevent password loss.
8. never use public wi-fi
public wi-fi can be highly insecure and expose you to hackers who take your private data and steal your wallet. use a vpn to encrypt your internet traffic, or avoid using public wi-fi to access your crypto accounts.
conclusion
it is always preferable to be cautious when dealing with crypto assets , and adhering to these eight best practices provides a solid barrier against fraudsters and con artists.
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