Now that more people are adopting cryptocurrency and taking part in ICOs, it’s important to be aware of the risks when using these digital financial assets. Cryptocurrency is, without a doubt, more appealing and convenient for many because it eliminates the “middleman” of government control and makes dealing with international transactions easier, faster, and more secure.
Over time, as cryptocurrency use becomes more mainstream, it could eliminate the need for banks and services that transfer money.
While cryptocurrency has been around since the Bitcoin in 2009, it’s still new in regards to currency. Like all things related to technology, cryptocurrency still needs to work out some glitches, one of them being security issues, particularly scams.
You may remember hearing about one of the latest scams related to ICOs that was attempted by a company called PlexCorps. The company, who was involved in marketing and selling PlexCoin, raised around $15 million from thousands of investors who had trusted in the company.
Although the U.S. Securities and Exchange Commission (SEC) was able to stop the ICO scam before more money was lost, it raises questions and makes many wonder how to keep their cryptocurrency safe.
How To Protect Your Digital Financial Assets
Unlike paper money, cryptocurrency isn’t locked up in a gigantic vault. While paper money can be successfully stolen if someone works really hard (and there have been many successful burglaries over the years), your digital financial assets are far more vulnerable.
Does it mean you should stop using cryptocurrency? Absolutely not but you should be aware of the risks and take the appropriate actions to protect your assets. Here are some steps you should definitely consider.
Boost Your Security
PCs and other mobile devices typically have antivirus software included and installed when you purchase your tech device. While it offers adequate protection, it usually covers the basics and can still leave your computer or device open and vulnerable to a variety of malware.
Even notoriously secure tech companies like Apple have major security breaches in their software and while they are able to fix it quickly, it doesn’t take long for information to be compromised. If you have antivirus software on your computer that’s good but you should definitely consider installing backup security, like TotalAV, that will offer you complete protection.
Remember, having good software isn’t the only fix to making your cryptocurrency more secure. Being mindful of the way you browse, pay attention to how your computer runs (is it slower than usual), and even installing ad blocking software can help. Hackers will find any space that’s vulnerable.
Store Your Digital Money In A Cold Wallet
If you’re a newcomer to cryptocurrency, you may have read a lot of discussions about hot and cold wallets for storing your money. While both do what they are intended to do, a cold wallet is by far the safest and most secure option.
Cold wallets (or a cold storage device) is not connected to the Internet while a hot wallet is always connected. A cold wallet only becomes vulnerable when it is connected to the Internet or if someone gains access to your recovery seed.
Your recovery seed code is given to you when you set up your wallet. Users are strongly encouraged to write down the code and store it in a safe place such as a safe or a flash drive (which is used for nothing but the code). While you’re finding safe storage for your recovery seed code, don’t forget to store your cold wallet in a secure place (offline) as well.
Secure Inactive Cryptocurrency
Some experts recommend taking your cryptocurrency off the exchanges if you aren’t actively trading. Use the same precautions as you would with securing your cold wallet. A personal account may seem secure, but you can never be too sure.
Consider Two-Factor Authentication and Strong Passwords
When you don’t encounter any suspicious activity or a breach of security, it’s easy to get comfortable with your online accounts as they are but you should never let your guard down. Always have a strong password and consider backing it up with two-factor authentication.
While cryptocurrency remains relatively new, it’s only a matter of time until we learn how to keep our digital money more secure. In the meantime, by following some easy steps and monitoring your accounts carefully, you should be able to keep your ICOs and cryptocurrency protected.