Although cryptocurrencies open up many exciting possibilities, they also present many risks and dangers for the inexperienced. To eliminate some of the risks associated with holding, using and trading cryptocurrency, you need to follow the three basic security principles outlined below.


Protect your privacy

Due to the nature of the internet, information can spread very quickly, but sometimes this can happen in undesirable directions.

There are many people trying to steal your cryptocurrencies using tactics that serve their malicious purposes. Many threats and attacks typically target a broad audience and operate as a network. In this way, instead of targeting a single person, they try to catch everyone who is easily fooled and distracted enough. However, if you unknowingly make yourself a target by revealing sensitive information, more sophisticated and focused attacks are likely to occur against you.


Suggestions:

  • Considering the risks of bragging about your successful trading streaks

  • Not sharing addresses you have used before

  • Being careful about sharing your balance

  • Avoid sharing information linked to your offline identity

  • Using encrypted communication channels


Think long term. A few satoshi in your address can become much more valuable in the coming years. Or it may not come. During this period, you may even have disposed of your cryptocurrencies. Does it matter? This is how you can prevent a potential attacker, distant relative, merely jealous stranger or acquaintance from noticing you.


protect yourself

Users of both traditional banking systems and cryptocurrencies often become victims of similar frauds and scams. However, there are various factors in cryptocurrencies that place the responsibility on the end user. The most important of these is that the system is not based on trust and the processed trades cannot be changed.

Banks, which are considered trusted entities, have full custodial control of the money. Banks are regulated and communicate with each other. This makes it easier to protect and fight against fraud. If you get hurt or actually make a mistake when transferring money to your bank account, you can usually request a refund. In the case of cryptocurrencies, once the transaction spreads across the network and is verified, it becomes irreversible.

Be careful. Learn about phishing tactics, keyloggers and other common threats revealed in Binance Academy. Being informed about these dangers will help you keep your coins safe.

Using strong and unique passwords and enabling 2FA protection for your online accounts should be the first steps you should take to increase your overall security level.

You should also remember that you need to protect yourself from yourself because you are (probably) human and people make mistakes. Making a typo, sending tokens to a wrong address, or simply making the wrong decisions while performing a backup can compromise your security and cause many unpleasant situations.

Everyone has heard the saying “measure twice, cut once”. This saying is very useful when it comes to using and protecting cryptocurrencies.


Be your own bank

In order to guarantee your access to coins and keep your security at the highest level, it is recommended that you store your private keys offline. Although exchanges are now more reliable than ever, it is still recommended to keep the majority of your balance on exchanges only if you are actively trading. Moreover, similar to money in a bank account, you cannot claim ownership of coins unless you are the only one with your private keys and have access to them.

For the first time in history, you have the opportunity to own a digital asset in a way that is similar to owning physical cash or a piece of precious metal. Unlike these other assets, you can back up your cryptocurrencies on a piece of paper and access your holdings safely anywhere in the world.

Of course, storing and protecting your cryptocurrency keys carries many dangers, as mentioned in the previous section. Fortunately, there are tools available to help you with these challenges and enable you to reap the full benefits of new technologies.

Types of cryptocurrency wallets designed to hold your private keys vary in terms of security, ease of use, number of uses, and even accessibility. Evaluate the options thoroughly and choose the one that best meets your needs.

Software and mobile wallets offer a wide range of features and are generally easy to use. Their biggest disadvantage in terms of security is that they connect to very complex and often online environments such as mobile phones or computers. These factors provide many opportunities for viruses and hackers to access your coins, so inexperienced users should only use these tools for smaller amounts of cryptocurrencies.

Paper wallets, which are pieces of paper on which you write your private keys (or those engraved on a piece of metal), are generally known as the safest way to store private keys. But they are difficult to handle and are only suitable for one-time use.

Software wallets are best at balancing ease of use and security. These pocket-sized devices keep your private keys offline, protecting them from malware and hackers, but they cost you $70 to $200 and require physical confirmation for most actions you make.

Remember that security is never absolute and complete. You need to update your information from time to time and check your potential weak points at regular intervals.

This article is provided by Trezor.io