3 Ways To Stay Safe When Using Cryptocurrency Online



Crypto trading is actually less dangerous than most people who aren’t involved in it think, at least, in the ways that they think that is. Basically, cryptocurrency is not ‘dodgy’ because it is a completely unregulated means of ‘cheating the system’. Rather it is simply a means of decentralizing digital currency by handing autonomy over a transaction to those whose money it is, without the time delays and money being siphoned off by regulatory authorities. However, there are significantly dangerous to crypto traders that come in different forms. Cryptocurrencies use blockchain technology to protect transactions to maintain security in the absence of those authorities.

How Blockchains Protect Cryptocurrencies?

A blockchain is a form of the digital ledger in which data are stored on an online database, in which each entry is formulated within a block. Each block contains three elements: 1) the data itself, 2) a unique ID code called a Hash, and 3) the Hash of a previous block. These ID codes link together each block in a blockchain, which is then distributed across a network of affiliated nodes. Any tampering of any kind within a block changes the ID codes. When a transaction is made, it is recorded in a new block. Any later alterations to that block render all proceeding transactions invalid. The validity of a transaction is also confirmed or rejected by a collective algorithm across all affiliated nodes, which must be unanimous. The result is that it is nigh impossible to alter the data of any cryptocurrency transactions, as any malicious attempts are automatically met with invalidation. This makes cyber-crime within a cryptocurrency system extremely difficult.

Research Well Before Investing

However, there are dangers of a different kind within the crypto trading subculture, and these usually come in the form of financial insecurity rather than data insecurity. To put it simply, the biggest danger of crypto trading is not that criminals will steal your money but rather that you will lose it all due to simply not understanding what it is that you’re dealing with. The cryptocurrency marketplace, as a direct result of decentralization, is one of the most extremely volatile in existence, with the potential to make you are millionaire one second and financially ruin you the next. Famously, for example, Dogecoin went from less than $0.008 to $0.65 in value in just six months before declining again a year later to less than $0.07, according to OKX.com. This is no small part because there is no standardized means by which the value of a cryptocurrency can be determined. Rather a cryptocurrency is only as valuable as people feel it is at a particular moment. As such, crypto trading can be a far more high-risk, high-reward form of investment than most.

Vet Your Crypto Trading Platform

While it is extremely difficult for criminals to hack into and steal money directly from a crypto account, that does not necessarily stop criminals from stealing from you by committing fraud by giving you misleading information to secure willing transactions. Others can easily use cryptocurrency to commit money laundering, which can present significant legal risks to you if you inadvertently get involved. As such, all of the common-sense advice one would normally get regarding the credibility of potential business associates still applies. This is also why it is important that with crypto, just like any other form of trading, you should only ideally do it on a reputable and credible platform.

 

Mark Funk
Mark Funk is an experienced information security specialist who works with enterprises to mature and improve their enterprise security programs. Previously, he worked as a security news reporter.