Did you know that cryptocurrency scams cost consumers billions of dollars every year? That may seem far-fetched, but it is most likely only the top of the iceberg. You should endeavor to avoid falling prey to any of these con artists. Cryptocurrency trading has exploded in popularity in recent years. It is, however, tainted by con artists. Due to a number of frauds, you must have all of the information before you begin trading.
Here are 5 ways to Avoid Crypto Scam;
1. Do not Invest in Less Credible Cryptocurrencies
Following Bitcoin’s popularity and increasing demand, a slew of other cryptocurrencies have sprung up all over the world. It is really tough to keep track of each one’s legitimacy and performance. New cryptocurrencies can be less expensive, making them a more appealing investment option for most new investors. The selling point of these new currencies is that it’s too late to invest in bitcoin and that instead, one can take advantage of the opportunity to invest in one of the new and incoming currencies to make more money! That isn’t the case at all.
Always keep in mind that My Big Coin was shut down after clients paid $6 million for bogus alt currencies. However, it is critical to review the fundamentals of every cryptocurrency, such as its maximum supply and circulation. Bitcoin, for example, has a maximum supply of 21 million coins, of which 18 million are in circulation. Bitcoin is one of the world’s most valuable, trustworthy, and widely acknowledged cryptocurrencies.
2. Trade on Reputable Exchanges
Cryptocurrencies, like equities, are often purchased and traded on exchanges. Hundreds of bitcoin exchanges exist, with several of them having significant trading volumes. Only a few crypto platforms, however, may be deemed really safe: Kraken, Gemini, Coinbase, Crypto.com, and Binance are undoubtedly the finest and safest. Kraken has a specialized staff of cybersecurity researchers and is available in practically every country.
Gemini is licensed by the New York State Department of Financial Services and is extremely security-conscious, whereas Coinbase and Crypto.com both shown outstanding openness when they experienced security breaches. All of the aforementioned cryptocurrency exchanges are safe, have excellent cybersecurity infrastructures, and hold customer funds in specialized facilities that are geographically dispersed and closely monitored, some of which are manned by armed guards.
3. Ensure Your Devices Are Secure
Although bitcoin housed in exchanges or online wallets is vulnerable to theft, many service providers take great measures to secure their clients’ digital assets. Coinbase, for example, keeps 98 percent of user assets in redundant split storage encrypted with AES-256 and scattered regionally in safety deposit boxes and vaults. To avoid consumer losses in the case of an attack, these deposits are also guaranteed.
If you want to keep cryptocurrencies on your own devices, be sure they’re well-protected against theft. According to the Anti-Phishing Working Group, roughly one-third of all computers throughout the world are infected with malware, implying that most PCs lack adequate protection. Cryptocurrency users, unlike credit card users, have no method of recovering their funds if they are stolen. There are a few things you can do to keep your gadgets safe:
To guarantee that your device is never affected, install anti-virus and anti-malware software and update and run it on a regular basis.
All data on your devices should be encrypted. Criminals won’t be able to access the cryptocurrency if the device is taken, and ideally you have a backup.
To store digital currency in a way that secures them from device-level attacks, use a secure wallet program.
Consider operating systems that are less vulnerable to attacks than Microsoft Windows, such as Linux or MacOS.
4. Store Your Crypto in Multiple Cold Wallets
If you trade cryptocurrency rather than simply retaining it, keeping the majority of it in exchange may appear to be the greatest solution, but it is not a smart idea from a cybersecurity standpoint. While there are secure exchanges, security breaches do occur, and some platforms suspend withdrawals on a whim, particularly during downturns. Clearly, the best strategy is to keep your crypto in various wallets, ideally cold or hardware wallets, independent of exchanges.
Although some software wallets are secure, cold wallets are preferable in almost every regard, especially in terms of cybersecurity, because they are not even accessible over the internet. If you’re a trader, you should keep the majority of your crypto in many cold wallets and only a little percentage in a software wallet or on an exchange.
5. Use Two-Factor Authentication and Multiple Passwords
In a research conducted by the American cybersecurity firm Digital Guardian in 2020, 61% of respondents indicated they use the same password on different websites, despite one in every five admitting to having their internet account compromised. Simultaneously, 89 percent of poll respondents claimed they were confident in their password management processes. However, using the same password across numerous platforms is a no-no, and it’s probably the worst thing you can do for the security of your online accounts in general.
If you want to keep your crypto safe, be sure to use difficult, one-of-a-kind passwords that you update at least once a year. Don’t keep your passwords in plain text if you have trouble remembering them. Consider investing in a safe password manager instead. The good news is that two-factor authentication, or even multi-factor authentication, is now available on the great majority of crypto exchanges and other comparable sites. To obtain access to their account, these authentication techniques require the user to give at least two verification factors (e.g., an SMS code), which obviously makes breaches significantly less likely.