Given its digital nature it’s easy to see how Bitcoin and other cryptocurrencies can be easily compromised. Although the network and technology itself is immutable it’s vulnerable to theft, hacking and scams.
If you’re the owner of a significant amount of Bitcoin, you’ll want to protect yourself against wallet vulnerabilities, secure your private keys and observing good practices such as recognizing scams from real investment opportunities.
Here are 4 strategies to reduce Bitcoin risks as much as possible.
Get a High Quality, High Security Wallet
Bitcoin wallets are unlike traditional wallets in that they hold a number of cryptocurrencies, including Bitcoin. Specifically, these were made to hold Bitcoin in the form of private keys and offer some sort of protection to keep it away from prying eyes.
Wallets can be software or hardware, and each comes with its own set of pros and cons. What you want at the base level is something that can be protected with a password and have updated encryption technology.
Do Not Put All Your Coins in One Pocket
Your ‘pocket’ in this case is where you hold most of your Bitcoin at a time. Day traders will usually put them in their crypto exchange account so they can be moved or traded at a moment’s notice.
However, for most of us we won’t need to put them in and entrust all your assets in a website. There’s the danger of hacking and stealing all of the users’ crypto, something that has happened frequently.
Your best bet is to put enough that you can comfortably make transactions, then the rest should be kept in an offline or hardware wallet.
Do Your Research on Trading Platforms
For every legitimate cryptocurrency exchange or trading automation website there’s at least one that’s fake and looking to scam unsuspecting investors.
The boon that comes with trading apps and software can’t be understated, as they can help maximize profits with as few actions as possible. You can open an account and start learning how to make money with analytics, forecasting and executing your plan to perfection.
Be Wary of Schemes and Scams
Bitcoin has gained world recognition, and a significant percentage of fiat currency has been invested in it. This has attracted the attention of hackers and unscrupulous individuals who wish to make money by cheating people off theirs.
Bitcoin exchanges, websites, cryptocurrency platforms and emails are just some of the things you need to double check before signing up for an account. Make sure you do not give out personal information or security details, such as your password or bank account to anyone, even if they say they’re a representative of a crypto exchange or that they’re from a bank or local government.
Likewise, do be cautious about opening email and direct messaging links as they could lead you to a page that collects your information. If an offer is too good to be true it probably is, so rather than risk it you should close or delete the email, message or website.