Crypto Theft and Hacks –

Protecting Your Bitcoins

How Do You Protect Your Bitcoins from Theft and Hacks

Despite the fact that the cryptocurrency industry has only recently gained widespread attention, there is already a narrative that is so common as to be almost pedantic. Malicious hacks can affect a single person or an entirely digital currency exchange.

As a result, a significant amount of digital currency goes missing. The hackers vanish into the anonymity of the internet, never to be seen or heard from again. They take a large sum of money with them, which is hidden in digital assets that are impossible to track or recover. We will be looking at measures you can take in protecting your bitcoins.

The Methods of Protecting Your Bitcoins From Theft and Hacks

This story of digital asset theft has become all too common, to the point where some investors are hesitant to participate in the digital currency space at all.

Indeed, as the cryptocurrency space expands and evolves at a breakneck pace, so do the methods used by thieves and hackers to steal tokens and coins. Investors who are vigilant and prepared, on the other hand, can take precautionary measures to protect their digital assets.

Wallets Are Crucial

Many investors will purchase a popular digital currency such as Bitcoin or Ether on an exchange only to keep it on that platform. Although digital exchanges take their own security measures to avoid theft, they are not immune to hacking.

Investing in a wallet is one of the best ways to protect your money. Although new designs are constantly being introduced, there are two main types of wallets. Hardware devices are probably the better of the two types.

Physical (or “cold”) wallets resemble USB drives and serve as a physical storage device for tokens or coins. Each hardware wallet has a private key, which is a password-like piece of code that enables you to decrypt the wallet and access the coins or tokens it holds. While hardware wallets are extremely effective against digital thieves, there is a downside: if you lose your password key, you’ll never be able to recover your wallet’s contents.

Different kinds of Wallets

There are secure online wallets available for those who are hesitant to use a physical device to invest in digital currency. These work in a similar way, but without the need for a handheld device.

Similarly, online wallets frequently have non-recoverable private keys, so it’s critical that you keep your private key in a secure location that you’ll remember. People have gone to great lengths to keep track of their keys, storing them in safe deposit boxes or encrypting them in graphic files. Some users have even had their personal information tattooed on their bodies.

Online wallets in the form of paper wallets are a subset of online wallets. Web platforms such as BitAddress or WalletGenerator generate them. These programs generate Bitcoin addresses and private keys, which can be printed. The CryptoHex wallet goes a step further in the process. Instead of printing the important information on paper, this service writes or punches it on a metal strip.

Another option is to use a desktop wallet. They are not connected to the internet in any way. However, because viruses exist that are designed to retrieve information from these wallets, they may not be as secure as the other options.

Digital Currency Exchange Platforms

Digital currency exchange is used for the majority of cryptocurrency transactions. Users must buy and sell using either a fiat currency or a different cryptocurrency on these platforms, which are typically accessible via a web browser or a web application.

Some of these exchanges, like any bank, provide FDIC insurance for the first $250,000 deposited or held as a US Dollar balance.

For two main reasons, cryptocurrency security experts advise against keeping any digital currency holdings on an exchange. For starters, if the exchange is hacked, you could lose all of your assets. Second, the exchange holds your cryptocurrencies on an IOU basis, which means that if the exchange goes bankrupt, you may not be able to recover your funds.

Although savvy cryptocurrency investors typically move their holdings out of the exchange platform once a transaction is completed, there is still some involvement on the exchange platform in the process. As a result, cryptocurrency investors should exercise caution when deciding which exchange to use.

Popular digital currencies such as Bitcoin, Ether, Cardano, and Ripple are often available on a wide range of exchanges. Because these exchanges are not all created equal in terms of safety and security, investors must conduct some due diligence to ensure that they are not introducing unnecessary risk into the transaction process by using an unsafe exchange.

Other digital currencies, particularly those that are less well-known or newer to the scene, may have fewer exchange options. In any case, it’s probably best to avoid an exchange that appears to lack security.