Mitigating Cybersecurity Risks for your Cryptocurrency Wallets

Mitigating Cybersecurity Risks for your Cryptocurrency Wallets

Last Updated on August 10, 2020 by CryptoCreed

You don’t need to be a tech guru to know cryptocurrencies like Bitcoin, Ripple, and Ethereum that exist on the blockchain. About a decade ago, the term ‘bitcoin’ was unfamiliar to many. Today, everyone wants to lay their hands on bitcoin to take advantage of the more than 1,000,000% ROI gains the premier coin has given investors.
Some individuals are, however, willing to go farther than others in the bid to get cryptocurrency. Numerous hackers are lurking on the internet, trying to steal your digital currencies. According to Forbes, in 2019, about $4billion in cryptocurrency was stolen. These criminals use a variety of methods to achieve their aim.

Processes used by Hackers to Steal cryptocurrency

Phishing

Phishing is an illegitimate way of getting unsuspecting victims to give up their login details to a particular website. It involves the creation of a website exactly similar in design to that of a real website.

The victim visits the website, assumes it is the original one and fixes in his/her login details, which get sent to the hacker. Phishing attacks are usually facilitated through email, with the hacker creating a false sense of urgency.

Hacked Crypto Exchanges

Since digital currency exchanges store a lot of cryptocurrencies, they’re prime targets for hackers. In 2014, at least $350 million worth of bitcoins were stolen from the Mt. Gox exchange. In 2019, $40 million in crypto was stolen from Binance, the largest crypto exchange.

The U.S. Department of Homeland Security discovered that at least 1 in 3 cryptocurrency exchanges have been hacked at least once.

Protecting your Digital Currency from these Criminals

Use Hardware Wallets

Hardware wallets are considered the safest form of wallets to keep your cryptocurrency. To access your crypto, you would need a private key. Any hacker who has access to that private key could get into your wallet.

A hardware wallet stores your private key offline, ensuring it remains inaccessible to hackers. Even when you plug the hardware wallet into a computer to make a transaction, your private key would be created offline. Even if the computer you use is infected with malicious software, your private key will remain safe.

There are numerous hardware wallets you can purchase like Ledger, Trezor, and KeepKey.

Use a VPN while Trading Crypto

While cryptocurrencies offer a certain level of anonymity, they can’t protect you from web trackers and cookies. A Virtual Private Network can, however, encrypt your internet traffic when you trade cryptocurrency.

If a hacker is connected to your home router or public Wi-Fi that you’re using, he/she would be able to spy on your activity, including your private key and login details to online wallets. Downloading a reliable VPN app would protect from traffic tampering and snooping.

A VPN even protects you from spying by your government and Internet Service Provider (ISP). One of the reasons Bitcoin was created was to protect user identity. Being tracked by third parties would defeat that purpose.

Use Multi-Factor Authentication

Traders that engage in active selling and buying of cryptocurrency pairs need digital currency exchanges. Using two-factor authentication would go a long way in protecting your account.

This way, if a hacker gets ahold of your username and password, he/she would need extra verification to access your account.

Check Reviews for Third-Party Applications

Third-party applications perform a variety of functions like tracking your cryptocurrency portfolio’s ROI in real-time, trading for you, and so on. However, third-party apps need sensitive data to operate properly.

Some hackers create malicious third-party apps to wean data from you. Some of these cyber-attackers could even offer the application for free.

Download applications that have positive online reviews from the official sources.

Final Thoughts

Since the cryptocurrency price boom, hackers have increased attacks on cryptocurrency users. From attacking exchanges to installing malware, consistent attempts are being made to get their hands on your digital currency.

To protect your funds, you can use a VPN, hardware, download trusted third-party applications, and activate two-factor authentication for your online crypto wallet.

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