What Will Make Your Hard-earned Cryptocurrency Safe From Scammers
Tips On How To Safeguard Your Digital Currency In Your Wallet And Recovery Key Protection.
Are you buying Stellar or Cardano because of the hype? Do you have your own price prediction? Anyways, you have to be careful. Times are changing and the bad boys don't drive BMW'S anymore. They have a Tesla bought with other people's money.
The main allure cryptocurrencies and the market leader, Bitcoin, is having a decentralized system. The system guarantees no party or single entity involvement over any transactions. This makes it easy for a "bitcoiner" to have full access to his/her funds saved securely in what is commonly known as the wallet.
Still, on the point of wallets, it has a unique key which sole function is access of that particular wallet. The key comprises of 12-24 random words which makes it hard for any hacking from unscrupulous people to take place. Unfortunately, if you lose your key, you lose any access/rights to your wallet leading to money loss.
When an individual loses the recovery key, it leads to a prominent risk a cryptocurrency user can incur. Man is to error and technology may fail sometimes. It does not matter how much funds your wallet holds, all of it will disappear to an unknown realm. Moreover, the recovery key also known as seed can give unauthorized people access to your portfolio if you do not adequately secure it. Within minutes, your funds get drained with no line of a trace, making it impossible to track back your money. That is why some online services assist in the storage of the recovery key's information for a small price. Remember that it is advisable to store your recovery key locally away from any open connections.
Another issue is the value of cryptocurrencies. They are never stable because each day they drastically rise and fall. Illegal actions target the use of this ever-increasing method of transaction. For instance, in 2017, the value of cryptocurrencies increased by a whopping 2700 percent. The growth gave in to more risks from cybertheft and hackers.
There was trending news about cryptocurrency in 2018. Coincheck stated that unauthorized people had access to its wallet and stole approximately $520 million of XEM(digital currency). The company lets a person buy and sell digital currency online. Sadly, the after-effects of the hack affected 260,000 clients who stored their funds in the Tokyo based firm. Not only did Coincheck suffer a significant loss, but also Mt.Gox, also Tokyo-based, incurred losses of $480 million. These two are the most massive cryptocurrency heist which indicates that fraud and hacking are still on the rise. Remember, when there is money involved, there are always unscrupulous people trying to reap where they did not sow.
A recent study shows that in a single day, approximately $9.1 million in digital currency are lost to scams. The fraudsters come up with scam exchange firms especially performing transactions in the newer cryptocurrencies that most people are unaware. For a client to do any business, he/she has to deposit the funds on the platform. This makes it more risky for them to lose their money if the deposit is made to an online fraud service.
Tips To Safeguard Your Cryptocurrency Funds
The numerous digital currencies widely accessible encourages more risks of money lost. No explicit formula can assist a user to 100% safeguard their hard-earned money. But the following pointers can help a user lessen the risk of fraudsters draining their funds within minutes.
The best practical way is to store the recovery key in an offline device. This not only guarantees a secure backup but also makes it easier to recover with ease in case of arising problems.
Transact With Reliable Firms Or Person
Every transaction that you have to make, ensure the person is reliable and also check for the user reviews on the transaction firm's profile. This will help you have a better judgment to commence on trading without any second thoughts. But remember that the reports are only guides and not a clear green light.
Choose Your Cryptocurrency
When you do thorough research, you can get a proper digital currency you feel that will work best to your advantage. Some cryptocurrencies are more stable and secure, unlike others. Cardano and Stellar is going up. Maybe is only hype? The new snake oil? I don't know but the markets are talking. You can also consult a cryptocurrency guru, that will help you make a better decision. Furthermore, loyal users can get monthly dividends from some other cryptocurrency exchange firms.
To summarise, remember that cryptocurrency is intangible and your money is purely online. Never make any transaction with people you do not know. The easiest way to protect your funds is to store the recovery key somewhere safe to ensure you do not lose your hard-earned cash. Lastly, transacting in digital currency has more risk as compared using a fiat currency.