This week, a hack of the Wormhole Bridge linking the Solana and Ethereum Networks saw over $320 million of investors money wiped out. This is another contribution to the current statistics on cryptocurrency crimes which have recently hit an all-time high of $14 billion.
Scary, right? But let’s get one thing straight. When it comes to major cryptocurrencies like Bitcoin and Ethereum, the security is very high.
The media is full of scare stories about the likes of BTC being associated with scams and theft. But just like regular money, it’s the careless handling of cryptocurrencies and lack of personal security that results in losses.
So, how do you stay safe? That’s what we’re going to answer today. Here are five tried and tested techniques that you should use whenever you trade crypto.
Choose a secure exchange or broker to buy digital currencies
Choosing a good exchange is vital when it comes to safely buy and storing crypto. There are a lot of fraudsters out there, but there are also well-established and trusted platforms like eToro.
With a crypto account on a trading platform like the latter, the crypto community can take advantage of two Factor Authentication (2FA) to prevent hackers, a sophisticated multi-layered security system that is subject to constant updates, and full transparency of the platform and the people behind it.
All of which are equally important when it comes to keeping your cryptocurrency investment safe. If you choose an exchange or broker without these features, you may be setting yourself up for a fall.
Double-check wallet addresses, then check it again to keep your cryptocurrency safe!
One of the many notable things about crypto transactions is that they’re often irreversible if done incorrectly. A large chunk of lost cryptocurrencies disappears due to human error, like sending it to the wrong wallet address.
If you’re sending digital funds from your wallet to another, ensure you check that you’re sending it to the right address. If you’re making a particularly big transaction, perhaps send a small amount as a test first before sending the rest.
Diversify how you store your crypto with a hardware wallet and private keys
You’ve no doubt heard the term don’t keep all your eggs in one basket. Well, this applies to cryptocurrency too!
It’s important to diversify how you store your digital currency of choice. Most experts advise you to spread it between hot wallets (online) and cold storage (offline).
Hot wallets are often located in cryptocurrency market exchanges and used for the regular live trading of virtual currency. The latter is a trusted cryptocurrency wallet that is often a physical device protected by private keys.
When it comes to the private key and seed phrases associated with your chosen hardware wallet, it’s vital to never put it anywhere that has an internet connection, And it goes without saying: Beware of phishing scams, and don't tell the private key of your online wallet to anybody!
Use password managers
One of the worst things you can do on cryptocurrency exchanges is to use the same password for each web address. It's vital for cryptocurrency investors to change things up and use different login details and strong passwords for anywhere they have chosen to start storing cryptocurrency.
But keeping track of all of these passwords can be a nightmare. However, there is a solution. Use a password manager to keep track of the passwords to your legitimate accounts. There are many free options available online.
Beware of phishing scams and fake websites
Another increasingly common method hackers use for extracting sensitive information from investors is phishing scams using websites and email accounts.
These will often pose as your chosen cryptocurrency exchange to alleviate you of your seed phrase to your hardware wallets, ask you to send money, or trick you into telling them your password to your accounts.
Hackers are cunning, so you need to be one step ahead and identify the telltale signs. Look out for misspellings in the URL, lack of an HTTPS security certificate, or poor grammar. As an extra layer of security, utilize a strong password and two-factor authentication on all of your accounts.
In conclusion: Stay secure with your cryptocurrency investments
To sum things up. Crypto-related crime hit an all-time high in 2022. Whether it's BTC or other digital currencies, there’s no denying that there is an ample number of fraudsters out there seeking to alleviate you of your hard-earned digital currency.
But one of the key takeaways here is that overall the security of most digital assets and blockchain technology is safe. But you also have a responsibility to use common sense, do your own research, and keep your digital currency safe.
From choosing a trusted exchange to diversifying how you store your digital assets with a crypto wallet and a confidential private key, staying safe when trading digital currencies don’t have to be tedious. In the long run, it will be more than worth it!
Some Big Problems Cryptocurrencies Experience
Cryptocurrencies have for a while been crowned as the outlook of finance, however, it was not till 2020 that conventionally conservative turned to enthusiastic investors in this realm of cryptocurrency that is not straightforward. But, there are some issues distinctive to cryptocurrencies of which investors and enthusiasts must know.
1. The issue of diversity
The issue of diversity is a challenge investors need to face. Digital currencies are not interchangeable and diverse. The shocking numbers of cryptocurrencies vary across many dimensions, especially concerning safety, governance features, and programmability.
2.Cryptocurrencies are tied to fraudulent acts
The potential to neglect the financial infrastructure of a country is an advantage for fraudulent individuals because it makes it possible for them to disguise their involvement in shady activities.
For instance, Bitcoin's users are known or recognized only by their address on the platform. It is challenging to have evidence of a transaction or who an individual or institution behind the address is.
More so, Bitcoin is a comfortable home for fraudsters for carrying out illegal transactions. The most famous instance of a criminal act that involved bitcoin was the Silk Road incident. Shortly, Silk Road was a selling location for illicit drugs, guns, and different things, on the Dark web. It permitted consumers to pay in bitcoins. The digital currency was secured in Escrow, till the consumer confirmed evidence of goods. It was challenging for law enforcement agencies to identify the people or organizations involved in the exchange because bitcoin addresses were the only identification.
Later on, but, the FBI successfully took down the market and seized 174,000 bitcoin. Not too long ago, caused the infection to famous applications with ransomware. Transaction in Bitcoin has turned out to be famous with fraudsters.
3. There Is a Safety risk
One of the major issues crypto currencies experience is risk of security. Bitcoin exchanges are online and thus susceptible to hackers, malware, and functional issues.
It is rather unfortunate that by aiming at and launching an attack on a cryptocurrency exchange, hackers are enabled to have entry to numerous accounts and digital wallets where the digital currencies are kept.
An instance that is not so popular was the incident that occurred in 2014. It was the Mt.Gox hacking occurrence that experienced the Japanese exchange shut down following the theft of millions of dollars in Bitcoin.
4. A Market Risk also Exists
Similar to any type of investment, cryptocurrencies value tends to fluctuate. This should not come off as shocking. In their time of existence, digital currencies have experienced aggressive changes in value and a great level of sensitivity appearing as breaking news. This is because of the huge number of inexperienced and informal investors.
More so, if the unacceptableness of Bitcoin and other cryptocurrencies continues, digital currencies might also forfeit their values.
Cryptocurrency enthusiasts, investors, and traders won't stop speculating the outlook of cryptocurrencies. Everything we can put at the back of our minds is that the journey would be intriguing.
Ethereum and Eth Mining
There is no doubt that cryptocurrency has become an ever-growing phenomenon. Globally, cryptocurrency is being heard of, used and transactions are being caries out on it.
What is a Cryptocurrency?
Cryptocurrency is a digital currency made to function as a means of exchange via a P.C network that does not depend on a central government. Its authority is decentralized. It does not need a bank or authority to approve or maintain it.
What is Ethereum?
Ethereum is one of the most widely known cryptocurrencies the following blockchain. It is a platform operated by blockchain technology. The platform of Ethereum is safe due to the shared feature of blockchain technology. This safety allows Ethereum to gather value.
The platform of the digital currency backs up ether with a network of dApps. These are known as decentralized apps. A major part of the way the platform runs is Smart Contracts. It came from the Ethereum platform. A lot of Defi (decentralized finance) and other apps make use of smart contracts combined with blockchain technology.
What is Mining?
Mining is the process that cryptocurrencies make use of to create new coins and make new transactions verification. It takes the involvement of decentralized computers in the globe that are responsible for the verification and securing blockchains. Blockchain keeps a record of cryptocurrency transactions.
What Ethereum Mining is?
Do you know that mining can not only be done on the Bitcoin platform but also on cryptocurrencies platforms such as Ethereum and others? What is mining on Ethereum? It is simply making a block of transactions to be put on the Ethereum blockchain.
Similar to Bitcoin, Ethereum presently makes use of a PoW (proof-of-work) consensus mechanism. Miners of Ethereum use computers to make transactions and create blocks.
Reason There are Miners
There is a necessity to make sure that everybody consents to the way transactions are carried out, in a decentralized system such as Ethereum. How do miners help? They ensure this happens by providing solutions to computational challenging puzzles to create blocks, preventing attacks from happening to the network.
Who Are Those that can Mine on Ethereum?
Generally, any individual can mine Ethereum on the network making use of their P.C. But, everybody can't mine Ethereum and make a profit. Majorly, it is a must for miners to buy or get computer hardware specifically for this purpose to mine profitably.
Though it is a fact that everybody can operate the software for mining on their P.Cs, the likelihood that the average P.C would yield adequate block gains to meet up the costs of mining is very low.
What does it Cost to Mine Ethereum?
Costs of the hardware needed to make and protect a mining rig.
Equipment for the support of a mining rig cost. Some equipment like electric wiring and ventilation.
Cost of electricity for operating the mining rig. Whether a miner is operating in a pool, the pools cost a fiat percent amount of every block made by the pool.