Cryptocurrencies are becoming more and more popular, with millions of people all over the world investing their money into them. While this may seem like a smart move, it is also a source of danger. After all, these virtual coins are only as secure as the exchanges you use to buy, sell, and store them.
If you own some cryptocurrency, it is important to know that there are ways to protect your transactions from hacking and fraud. If your digital assets are stolen, then there are ways that you can get them back. In this article, we will be sharing with you 10 ways to protect your cryptocurrency transactions from hacking and fraud, so read on to learn more.
Backing up your wallet
While it might be a good idea to store your cryptocurrencies in an online wallet, it is also a great idea to back up your wallet. For example, if you keep your Bitcoin in your Coinbase account, make a backup of the private key that you use to access those funds. This way, in case you lose your password, you still have access to your funds. Similarly, if you use a hardware wallet like the Nano Ledger S, make sure to back up the wallet's private key. Always keep a copy of your backups in a different location, in case your computer fails, or a disaster strikes your home.
Keep in mind that if a hacker gets access to your computer, they could potentially steal your backup key as well. It is always a good idea to print out your private key. Make sure you delete the private key from your computer after you have printed it out. This way, even if a hacker were to gain access to your computer, they won’t have access to the private key because it’s on a printed paper.
Don't share your private keys
While it is a good idea to back up your private keys, you should also keep in mind that if someone obtains access to your keys, they could use them to transfer your funds to another account. Therefore, you should never share your private keys with anyone. If someone regularly texts you the combination to your crypto wallet, then delete the texts immediately.
Private keys are long strings of numbers and letters that are unique to each wallet. These keys are what allow you to access and spend funds that are stored in that wallet.
It is important to keep in mind that private keys are not the same as your address. Your address is what other people will send you money through; it is a locator for your funds. Your private key is what allows you to access those funds.
Use a Hardware Wallet
A hardware wallet is a far more secure form of storage for your cryptocurrencies than an online exchange. You should, therefore, always use a hardware wallet when you purchase, sell, or spend any type of cryptocurrency. Online exchanges are notorious for hackers stealing funds from users' accounts. If your exchange gets hacked, then there is no way for you to get your funds back.
A hardware wallet, on the other hand, stores your private keys on a physical device. This means that hackers would need to physically steal the hardware wallet in order to access your funds. Furthermore, since these wallets are offline, they are not susceptible to cyberattacks.
Enable 2-factor authentication (2FA)
This one is a no-brainer. If you don't have 2-factor authentication (2FA) enabled on your account, then you're asking to have your account hacked. 2FA is the only way to protect your account from being compromised. It involves using a second form of authentication to access your account, like using a code that's only available to you to access your account.
A majority of the cryptocurrency exchanges require you to enable 2-factor authentication (2FA) in order to protect your account. 2-factor authentication adds an extra layer of security to your account by requiring a second authentication, usually done via a MFA code (secret question and answer) or another biometric method.
Most of the larger exchanges, like Coinbase and Binance, have added 2FA to their accounts. If you do not use 2FA on these exchanges, then anyone who gains access to your account can transfer the funds out of it.
If you have the option, it is recommended that you enable 2-factor authentication on all of your accounts that have access to your funds. This way, if someone were to gain access to your email account, they would not be able to log in to your account and steal the funds.
Always Install an antivirus software
It is important to always keep up with the latest antivirus software so that you can protect your computer from viruses and other malware. Make sure to keep your antivirus software up to date so that you can detect new threats as they arise and protect yourself from them.
One of the best ways to do this is to use a software that can update automatically, like Windows Update. If you do not use Windows, you can also download automatic updates for your antivirus software.
The antivirus software that you use can also be configured to scan your computer for viruses when you download and install new programs. This way, you can make sure that the programs that you are using are clean.
While many people believe that installing an antivirus software is a cumbersome process, they are actually easy to set up and use. Make sure that you enable the cryptocurrency feature in your antivirus. Doing so will allow you to scan any incoming or outgoing transfers for viruses. It's also a good idea to scan your computer for any signs of viruses weekly.
Observe the five Ms
When you're storing large amounts of cryptocurrency, it's important you observe the following:
Make sure that you're using an offline computer when you're generating or storing your private keys.
Make sure that you're keeping your computer's operating system and applications up-to-date to protect against any potential threats.
Make sure that you store your private keys in a safe place that's separate from your primary computer. This will prevent you from accidentally deleting or altering your private keys when you're using the computer.
Make sure you keep your private keys secret. Although it may seem like a good idea to share them with a few friends, you should never share them with anyone. If someone gains access to your private keys, then they could potentially steal all of your coins.
Make sure you don't download suspicious content or programs, don't open suspicious emails or links, and don't log into or create new accounts from sketchy locations.
Use a VPN
A Virtual Private Network (VPN) is a technology that allows you to create a secure connection over a less-secure network. For example, if you're using a public Wi-Fi network, then a VPN will encrypt your internet traffic so that nobody can spy on it as it travels over public networks. If you're using an unsecured network, like Wi-Fi at a coffee shop, a VPN can ensure that nobody sniffs your traffic or intercepts your data.
To ensure that your VPN is protecting your privacy, you should select a provider with plenty of security and privacy features. VPNs with strong security and privacy policies, tend to use strong encryption and provide users with plenty of control over their data.
For example, you can use a VPN to connect to a trading platform that is hosted on a different computer than the one that you are using right now. This way, anyone who hacks your computer would not be able to view or steal your trading information. ExpressVPN and TunnelBear are some of the VPNs you can try.
Choose The Right Cryptocurrency Exchange
If you decide to use a Cryptocurrency Exchange then do your research. When choosing an Exchange, it's important to select one that's secure and has good reviews. Avoid Exchanges with negative reviews and stay away from Exchanges that appear sketchy or relatively unknown. Put simply, there are times when being an early adopter is great, trying out an unknown Exchange is not one of them.
It is also important to remember that while most Exchanges seem safe, there is still the risk of getting hacked. When researching the exchanges that you want to use focus on their security and safety features.
For example, Binance is a very popular cryptocurrency exchange and it has a very solid reputation for security. However, it is also somewhat complicated to use, which could prevent you from using it effectively.
Other exchanges, like Bittrex, are much easier to use, but are not as secure. It is important to understand the pros and cons of each Exchange that you are using, so that you can make an informed decision.
Overall Coinbase seems to be the best all rounder followed by Voyager, BlockFi, Uphold, Kraken, eToro, Bitcoin IRA, Crypto.com, Binance and Hodlnaut.
Don't Use An Automated Trading Bot
Automated trading bots are popular among cryptocurrency newbies. They allow you to set up trading bots that automatically buy and sell cryptocurrencies on an exchange for you. While it is true that you don't have to be an expert to use these bots, they do require a great deal of knowledge and expertise to be used effectively and safely.
It is also possible to make profits with cryptocurrency trading bots, most of them are only based on technical analysis and not on fundamental analysis. Fundamental analysis looks at the health of a company, whereas technical analysis looks at the flow of a transaction.
There is a big difference between the two and without having all of the information. It is very difficult to make an informed decision on which path to follow.
Track Your Cryptocurrency Exchanges
After your initial purchase, you'll need to keep a close eye on your exchange's activity. This will allow you to track any potential activity on your account. You should also keep track of the transaction history on your blockchain wallet. Doing so will allow you to identify any potential issues before they occur.
Typically people use applications such as Cryptocurrency portfolio trackers to monitor the total amount and value of their digital wallets, exchanges, platforms, and blockchains in real-time.
These apps let you track historic transactions, their worth, and destinations or sources. They also give the actual live price of any cryptocurrencies they support.
If a hacker were to access any of your digital wallets and undertake a transaction, you would be immediately notified by the Cryptocurrency portfolio tracking app. This will give you some time to secure your other digital wallets which haven’t been compromise.
Here are 24 Cryptocurrency portfolio tracking apps you might want to try:
Coin Market Manager