Cryptography is an essential part of online security. Cryptocurrencies offer investors cryptographically secure transactions. Still, the ICO market is plagued by scams and malicious hacks.
One of the reasons is that online exchanges and wallets hold digital coin transactions a period of time before finalizing them on a blockchain. This process happens because finalizing on a blockchain takes time, at least at this stage in the market’s development.
Another danger is the attraction cryptocurrencies have drawn because of their rising popularity. Socially engineered hacks, like phishing attempts, have targeted the crypto industry and those in the industry have tried to take steps to prevent these continued attacks. It was a response to the rampant fraud and online attacks that accompanied the record price rally at the end of 2017. However, scams like fake wallets and fraudulent cryptocurrency schemes still take place, so it’s something you need to watch out for if you’re dealing in cryptocurrencies.
The crypto industry has taken strides to pass security standards for exchanges in order to help enhance security. Individuals must also use caution and secure their own online activity; the industry can take all the precautions possible, but if you’re not making sure your technology is secure, you’re at risk. Security vulnerabilities are typically seen in the following areas:
- Wallets using fake websites
- Fraudulent ICO schemes
- Default login credentials
- Illegitimate exchanges
- Phishing attempts for private keys
Keep an eye on these areas to make sure your cryptocurrencies are safe.
Storage is the best security option
Experts and exchanges agree that the best way to secure crypto coins is in cold storage. That is, on a piece of hardware that remains offline and keeps your currency offline too. This can be as simple as a dedicated USB or external hard drive that holds private keys. More elaborate hardware devices continue to enter the market. They serve much of the same purpose but make encryption and device quality top priorities. These devices are designed and developed with cryptocurrencies in mind. A good one can be purchased for about $100. Encryption is also important as it serves as a deterrent to lost or stolen devices. Some even suggest maintaining a safety deposit box for this reason.
Cold storage makes transactions more difficult. They are certainly not impossible since offline verification is available. Though for the less technical, cold storage may not be the best option. Apps can be used instead, but only keep needed coins on them. Finally, always be sure to actively secure regular online activity.
Cryptocurrency users may even wish to go a bit beyond what is the standard in online security to ensure their crypto is safe.