Cryptocurrency has gained immense popularity among investors due to its lucrative returns. However, with the increase in cybercrime on cryptocurrency exchanges and individual wallets, investing in and storing cryptocurrencies is no longer as safe as it was once believed to be. Recently, BTC.com and Binance lost $3 million and $570 million worth of crypto, respectively. The FTX crash illustrated that major exchanges are no longer safe places for cryptocurrency.
Therefore, it is crucial to save your cryptocurrency in a protected space where no one except yourself can access it. Cybersecurity is a major concern for businesses of all sizes, given the significant rise in ransomware attacks and data breach incidents. However, for cryptocurrency exchanges, mining pools, and wallets, the risks are higher, as any breach can lead to a direct loss of huge sums of money.
To ensure the safety of your cryptocurrency, it is essential to understand the difference between trading and investing in cryptos. For trading, it is important to periodically withdraw profits and manage your crypto exposure to exchanges. For investing, it is critical to save your money on a decentralized wallet that cannot be accessed by third parties, especially exchanges.
There are two methods for saving cryptos: cold storage and hot storage. Cold storage means saving crypto on flash devices that have no connection to the internet network, also known as hardware wallets. Hot wallets are software wallets that can be connected to brokerage and other third-party and web3 apps to exchange or send them. Cold wallets are the safest option for holding your crypto, especially for investors who hold substantial amounts of digital assets.
Using reputable crypto wallets that are decentralized, such as Metamask and Trust Wallet, is a good practice to ensure the safety of your cryptocurrency. For investors who hold large amounts of digital assets, cold wallets like Ledger Nano and Trezor are a must. Additionally, using updated software and antivirus protection on your device is essential to protect your sensitive information from hackers.
There are several red lines to never cross when saving your cryptocurrency, such as saving crypto on centralized exchanges, sharing private keys with others, and clicking on suspicious email and messenger links. Double-checking before clicking on any email or messenger link is crucial, as hackers may use phishing attacks to steal personal data and money.
In conclusion, investing in digital currencies can be a great way to build wealth, but it is crucial to be mindful of cybersecurity hygiene when trading and investing in cryptocurrencies. By following best practices such as using reputable wallets and cold storage, updating software and antivirus protection, and avoiding suspicious links and sharing private keys, investors can ensure the safety of their cryptocurrency investments.