Is Crypto Safe?
The cryptocurrency market has seen a lot of volatility over the past year. Some coins, like Bitcoin and Ethereum, have gone up significantly in value since January 1st of this year. Other coins, like OmiseGO and Qtum, have had heavy losses during the same time period. The cryptocurrency market is known for its quick movements up or down in price which can make it difficult for beginners to enter or exit positions without taking a loss on their investment.
Despite its volatility, many investors are still looking for ways to maximize returns on their cryptocurrency investments. But how do you keep your investments safe? In this article, we talk about the ways you can keep your crypto transactions and investments safe.
Crypto and Hacks
It’s no secret that cryptocurrency platforms, wallets, and the link are prone to attacks. Even popular platforms like Coinbase and Binance have failed to maintain the safety of its users’ funds.
In fact, the most common types of cryptocurrency theft are hackers stealing coins from exchanges and online wallets. The reality is that even major cryptocurrency platforms aren’t doing enough to ensure their systems aren’t vulnerable to these types of attacks.
The best way for you to protect your investments is to move them into a wallet where you control the private key. Wallets like Trezor, Ledger Nano S, and Exodus offer you a safe way to store your crypto. Hardware wallets allow you to store your coins offline meaning they can’t be hacked and they won’t be subject to vulnerabilities in the internet or a cryptocurrency exchange.
Cloud vs Hardware Storage
Cryptocurrency platforms and exchanges are notorious for leaking customer private keys and other sensitive information. For example, when hackers hacked into the email address used by cryptocurrency exchange Bithumb, they were able to gain access to $31 million of the exchange’s customers’ cryptocurrency. These hacks can have extremely serious consequences not just for your investments but also for you personally.
In addition to these exchanges having poor security practices, there is still a chance that your personal data could be leaked if a company has access to your laptop or smartphone. This could happen even if you are using a cloud-based wallet or cryptocurrency exchange.
Cryptocurrency exchanges and cloud-based wallets are great for accessing your coins rapidly and on the go, but they aren’t that great if your goal is to hold your crypto long-term. Cryptocurrency exchanges and cloud-based wallets can be hacked, corrupt data is easier to access on a phone or computer than offline in a hardware wallet, or you may accidentally give away your private key.
For these reasons, hardware wallets like the Ledger Nano S and the Trezor are the best way to store your crypto long-term. Hardware wallets allow you to store your coins offline and away from internet vulnerabilities or hackers.
The most secure way to protect your cryptocurrency is to move them off of an exchange or cloud-based wallet and onto a hardware wallet. You can also keep your computers clean of viruses or malware to reduce the chance that someone will be able to access your data or private key from afar.
Volatility
The cryptocurrency market is known for its high volatility. If you plan on taking long positions in the cryptocurrency market, a hardware wallet like the Ledger Nano S is going to be your best bet. Hardware wallets allow you to store your coins off of an exchange or cloud-based wallet and keep them offline so that hackers or network vulnerabilities aren’t able to access your data. However, that doesn’t guarantee the return on your investment. After all, we see coins fluctuate in prices every day.
To better manage your risk, you should consider spreading out your investments into various cryptocurrencies. This way, if one coin’s value drops, you still have other coins that are performing well and can act as a buffer for the loss.
Always Do Your Research
You should never buy a cryptocurrency that you don’t understand or know much about. There are thousands of coins available on the market and it would be impossible to learn everything about them. But you should at least do your research on the coin or token that you plan on investing in.
Many beginners are attracted to new cryptocurrencies without understanding them. They hear the hype surrounding a particular coin and decide to invest without doing the necessary research on their underlying technology. By investing in a new cryptocurrency, you’re making an investment that could go up or down based on the hype surrounding it and its development team.
The Takeaway
The cryptocurrency market is volatile and there are a lot of risks when you invest in cryptocurrencies. But with the right knowledge and proper precautions, you can protect your investment by moving your coins into a hardware wallet like the Ledger Nano S to prevent hackers from stealing your coins. For more financial advice, head on over to our blog!