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The cryptocurrency market is still untrodden, so investors need to take immense precautions before exploring it
Over the past few years, the cryptocurrency industry has grown exponentially. As more and more investors are hopping on the bandwagon to buy digital assets, so are scammers who are waiting to snatch the valuable profits from the crypto investors. The growing popularity of the cryptocurrency industry not only calls for increased regulations but also increased awareness from investors. Investors generally store their profits and investment details in their respective cryptocurrency wallets, and these wallets are most susceptible to scams and hacks from illegal actors. There are several benefits of storing digital assets in a wallet. One of the main benefits is that investors will be able to keep them safe from hackers and thieves who might try to steal their coins and put malware on their computers. Another benefit is that the wallets give authority to the investors over how much power or control a third party will have over their money. But the saddest part in all of this is that the greatest threat to cryptocurrency investments is also through these wallets. Cybercriminals use sophisticated techniques to compromise digital wallets and transfer these crypto assets without the investor’s knowledge.
Most startups and businesses nowadays are establishing robust transactional methods with the help of cryptocurrency and blockchain. But these businesses suffer heavily due to thefts and phishing scams. Cybercriminals deploy ransomware by running code to encrypt data and then demanding payment in the form of cryptos. As identities can be hidden in most cryptocurrency wallets, so, it becomes an obvious choice for criminals to get what they want and still remain anonymous. One of the most common ways that criminals take control over a users’ account is through crypto-jacking. It is basically the practice of hijacking a computer to mine cryptocurrencies without the user’s knowledge. Also, another way is through ‘cloud-hijacking’, which occurs when hackers steal an organization’s credentials and access their cloud data where they run their crypto-jacking code, rather than on a local device.
How to protect your crypto wallets from hacks?
There are several steps that you can take to ensure that your cryptocurrency investments are safe. Firstly, own cold wallets, instead of hot ones. Storing private keys in a cold wallet, also known as the hardware wallet, is the most viable option as these come encrypted, keeping the keys safe. There are several hardware wallets in the market, but again, investors have to be extremely careful while choosing them to make sure they are not putting their money into scams. Secondly, focus on maintaining multiple wallets. There are no limitations in wallet creation, so investors can eventually diversify their cryptocurrency investments in multiple wallets. This will protect their portfolio and mitigate the loss of any breach.
Now, coming to the final and the most important question.
How important is it to maintain security in crypto wallets?
Well, by now, the answer to this question has become quite evident; extremely important. The cryptocurrency industry is constantly evolving, so, it is of immense importance that the investors increase their awareness of the cryptocurrency industry and learn more about the measures they can take to enhance security in their cryptocurrency wallets. Although fast-paced and ever-evolving, the cryptocurrency market is still untrodden. So, only being smart will gain lucrative awards.