User: Abike007
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You should be aware that a centralized cryptocurrency service does not offer the same level of money security as a bank. Crypto brokers, for example, are not as tightly regulated, and if funds are lost, they can be lost permanently. It is vital to keep yourself updated with information on cryptocurrency security to know what can go wrong and how to prevent such situations from arising.
Let's understand how secure cryptocurrency is first.
How Secure Is Cryptocurrency?
Blockchain technology is commonly used to create cryptocurrencies. The method transactions are recorded in "blocks," and time-stamped is described by blockchain. It's a lengthy, complicated procedure, but the result is a secure digital ledger of cryptocurrency transactions that hackers can't influence.
Transactions also necessitate a two-factor authentication process. While security measures are in place, this does not mean that cryptocurrencies are immune to hackers.
It is obvious to wonder why cryptocurrency security is so stressed when cryptocurrency is somewhat safe. Let's understand the risks that arise while engaging in the crypto sector.
Risk 1: When people leave cryptocurrency on exchanges
Many people leave their cryptocurrency on exchanges when they first start trading cryptocurrencies. It's easy since the funds and crypto coins are readily available for transactions. Still, hackers, unfortunately, also love the idea that so much cryptocurrency is in one single location, ready for the taking. Moreover, exchange hacking is not confined to other parties; employees and even exchange founders have committed significant fraud.
Risk 2: Storing Cryptocurrency Locally
In contrast to leaving seed phrases in centralized cloud storage, several examples of seed phrases are backed up on local devices and subsequently being lost or stolen, or the PIN/Password is forgotten. The problem with local storage is that it's easy to misplace it or for someone to track you down and steal it.
Risk 3: Being targeted by criminals.
The possibility of your crypto being targeted is quite real because so much of the personal information is out available to anyone who wants to target us. Email phishing attacks, SIM Swap assaults that bypass 2-factor authentication, and other smart social engineering tactics are all examples of personal assaults. In 2020, DeFi protocols were used in the majority of crypto thefts.
Conclusion
You can only select the best way to pick and set up your crypto wallet and other digital assets with seed phrase backups and other wallet setup options and hope to avoid tragic situations from taking place. But keeping yourself posted with information and updates related to cryptocurrency security is usually the best option when it comes to taking the best measures for staying safe in the crypto world.
original.
https://www.finextra.com/blogposting/20477/cryptocurrency-security-how-to-protect-your-digital-investment
You should be aware that a centralized cryptocurrency service does not offer the same level of money security as a bank. Crypto brokers, for example, are not as tightly regulated, and if funds are lost, they can be lost permanently. It is vital to keep yourself updated with information on cryptocurrency security to know what can go wrong and how to prevent such situations from arising.
Let's understand how secure cryptocurrency is first.
How Secure Is Cryptocurrency?
Blockchain technology is commonly used to create cryptocurrencies. The method transactions are recorded in "blocks," and time-stamped is described by blockchain. It's a lengthy, complicated procedure, but the result is a secure digital ledger of cryptocurrency transactions that hackers can't influence.
Transactions also necessitate a two-factor authentication process. While security measures are in place, this does not mean that cryptocurrencies are immune to hackers.
It is obvious to wonder why cryptocurrency security is so stressed when cryptocurrency is somewhat safe. Let's understand the risks that arise while engaging in the crypto sector.
Risk 1: When people leave cryptocurrency on exchanges
Many people leave their cryptocurrency on exchanges when they first start trading cryptocurrencies. It's easy since the funds and crypto coins are readily available for transactions. Still, hackers, unfortunately, also love the idea that so much cryptocurrency is in one single location, ready for the taking. Moreover, exchange hacking is not confined to other parties; employees and even exchange founders have committed significant fraud.
Risk 2: Storing Cryptocurrency Locally
In contrast to leaving seed phrases in centralized cloud storage, several examples of seed phrases are backed up on local devices and subsequently being lost or stolen, or the PIN/Password is forgotten. The problem with local storage is that it's easy to misplace it or for someone to track you down and steal it.
Risk 3: Being targeted by criminals.
The possibility of your crypto being targeted is quite real because so much of the personal information is out available to anyone who wants to target us. Email phishing attacks, SIM Swap assaults that bypass 2-factor authentication, and other smart social engineering tactics are all examples of personal assaults. In 2020, DeFi protocols were used in the majority of crypto thefts.