Bittime – In the world of cryptocurrencies, such as Bitcoin, Litecoin, and blockchain, you don't need to have a deep interest in technology or fintech to be familiar with the term.
However, just a few years ago, the idea that a digital currency would so quickly become a headline topic, let alone a popular investment option, would have sounded far-fetched. Now, consumers are wondering whether this obscure asset is worth adding to their portfolio.
Major Cyber Security Risks in the Cryptocurrency Industry
With so much media coverage of cryptocurrencies, it's easy to get carried away by the mystery and excitement associated with this innovative, though much-not-yet-well-understood, asset.
However, the risks are real. It can be a financial disaster for those who are not aware of it and do not know how to protect themselves from the dangers associated with digital currency. The following are some of the main cyber security risks to consider if you are dealing with cryptocurrency.
Check Today's Crypto Market:
Security of Your Cryptocurrency Account
To understand the risks of purchasing cryptocurrency, it is important to understand that each digital currency is accessed via a private “key,” which is a complex passcode that grants users access to a digital account.
“In terms of risks with cryptocurrency, I think the main one is that most people store their private keys on a PC like any other file," said Bryan Gour, cyber innovation architect at City National Bank. “There are a lot of dangers associated with storing keys on a computer.
This is very risky because hackers can easily access someone's computer. And once the keys are stolen, there's no way to get them back. It's like having a credit card without an authentication check. That money is gone forever."
Scott Sadler, CEO of Keystone Blockchain Investments is an investment manager, trader, and cryptocurrency policy expert. He also warned of the dangers of account breaches. “Cryptocurrency investments should be allocated to the “high risk” portion of your portfolio.
You are the only party responsible for the ownership and security of crypto assets and any errors are permanent. If you lose your keys, you could lose your investment permanently."
Crypto Exchanges Are Unregulated and Vulnerable to Hacking
What makes investing in digital currencies so thrilling is also what makes it risky. Because digital currencies are decentralized, nobody or administrator is overseeing the creation, movement, and management of the currency.
Cryptocurrency exchanges, where digital money is bought and traded, are inconsistently regulated–if regulated at all–depending on the country in which they are located. The government supervision or audit they have is far from the level of traditional banks.
There are also security concerns. Over the past few years, many exchanges have made headlines for massive security breaches, including Coincheck, which lost more than $550 million in cryptocurrency stolen by hackers, and Bithub, which lost approximately $30 million.
“The cryptocurrency world is the Wild West," explains John Gomez, CEO of Sensato Cybersecurity Solutions. “The number of attacks launched against exchanges and cryptosystems is staggering.
We have seen attacks by North Korea, terrorist groups, and countries, which can use the proceeds of attacks to fund their operations. Unfortunately, there is no governing body so there are no requirements for security audits, assessments, or controls regarding these systems."
Also Read: What is AnotherBlock? Change the Way We Support Our Favorite Artists
Confusion About Blockchain and Crypto Exchanges
Blockchain technology and even the basic nature of cryptocurrencies themselves are complex and difficult to understand. Typically, companies create something that investors can see, feel, or use.
But digital currencies are essentially non-physical entities – something that only exists in the world of the internet. Even the creator of Bitcoin, the first and most popular cryptocurrency, is a mysterious individual known only by the pseudonym Satoshi Nakamoto.
The unknown factors surrounding digital assets far outweigh the concrete facts, and that makes them a highly volatile investment. Because of such uncertainty, it is nearly impossible for even the most cautious investor to perform proper due diligence.
Are Cryptocurrencies Worth the Risk?
Given the potential cyber security risks of cryptocurrencies, as well as currency volatility, many advisors and financial institutions, including City National Bank, advise against participating in the cryptocurrency market at this time.
"Transaction errors cannot be corrected," Sadler said. "You are responsible for ensuring that each transaction you initiate has the correct amount and destination. Errors cannot be changed or corrected."
For investors looking for the thrill of high-risk assets in their portfolio, there are other options available.
How to Better Protect Your Cryptocurrency Accounts from Hackers
Despite the cyber security risks, many still want to participate in the cryptocurrency market - whether in the hope of becoming millionaires overnight or simply to be part of the new technology wave. If you are one of them, the following tips can help secure your cryptocurrency account.
1. Prioritize Security
A person's private key is the only way to access this type of investment, which is why it is important to keep it safe. "One of the best things you can do to protect yourself is not to store your keys online where they can be hacked," Gour said.
"It's best to use something called a hardware wallet – a thing that looks like a USB and contains your personal code – like Ledger or Trezor."
Using such a device means your keys are encrypted into a hardware wallet and when you want to make a transaction, you connect the wallet to your computer, but the code never leaves the hardware, making it less likely to be accessed or stolen from your computer.
You can also duplicate your wallet and store it in a safe deposit box, so you never lose your keys.
Also read How to Buy Crypto:
2. Arm yourself with knowledge
There is almost always some inconvenience on a technical level associated with fully understanding what a private key does and how a cryptocurrency system works.
"People have to realize that you can't just sit in front of a computer and click buttons like you can with an e-trading account," Gour said. "Cryptocurrencies require a much higher level of engagement." He encouraged those considering investing in cryptocurrency to read and learn as much as possible on the subject.
The more you know and are familiar with it, the better you can safeguard yourself against digital currency risks.
Another way to gain knowledge is through experience. Monitoring and trading digital assets requires more time, patience, and caution than traditional investing, Sadler said.
Sadler advises clients to start small. "I advise my clients to open an account, get a wallet, and buy small amounts," he said. “Buy $10 and then see what you're up against because if you lose it, it doesn't matter.”
Starting with a small investment will allow you to learn more about the process and understand how the platform works.
"Then, if you want to make a meaningful investment, you have to decide if you want to invest not only in cryptocurrency but also invest the time to learn about it so that you can be self-sufficient," Sadler said. "If not, then evaluate your options for using a third party to manage your investments."
3. Consult your Investment Advisor
If you have purchased cryptocurrency yourself or you plan to do so, let your investment advisor know. While they may not recommend purchasing cryptocurrency, they may be able to connect you with third-party resources to better educate and help you if you choose to do so.
Undeniably, buying cryptocurrency既 is exciting (jì yǐn qìu) (exciting) and full of risks. Knowing what the dangers are and how to protect digital assets will help you make the right decision to determine whether investing in digital currencies is the right choice for you.
How to Buy Crypto on Bittime
You can buy and sell crypto assets easily and safely via Bittime. Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti.
To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application. Learn Complete Guide How to Buy Crypto on Bittime.
Monitor price chart movements of Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and other cryptos to find out today's crypto market trends in real-time on Bittime.
Also Read:
What is a Crypto Wallet or Crypto Wallet? Understand the meaning, types, and how it works
When Will Cardano (ADA) Hit $237.73?
DISCLAIMER: This article is informational and is not an offer or solicitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
Comments
0 comments
Please sign in to leave a comment.