Investor’s Guide to Safe Cryptocurrency Trading Online

By Lucy Gregory
February 20, 2018

Created in 2009, cryptocurrency was started by Satoshi Nakamoto. Bitcoin became the revolutionized way to pay online without the bank or government getting involved. Since there are no transactions, users would not have to provide personal information – thus, making it a safe method for transactions online. According to a survey from Blockchain Capital, approximately 30 percent of millennials said that they would rather put an investment of $1,000 in cryptocurrency like Bitcoin than in government stocks or federal bonds. It is no wonder that Bitcoin has recently reached a record of $600 billion in the total market value, and Thomas J. Lee, the head of research at Fundstrat Global Advisors, predicts the total value of Bitcoin to reach $1.2 trillion by the end of 2018.

However, the main question many people ask is – have you invested in cryptocurrency? Digital currency is not restricted to Bitcoin. There are many new cryptocurrencies available like Litecoin, Ethereum, and Ripple to name but a few. It seems as if today’s millennials are driven towards the revolution of finance that the Nakamoto once started.

Security in Cryptocurrency Community

For the millions of individuals who have invested in cryptocurrencies, little has been discussed about the infrastructure and software of these digital currencies. With the early adoption of technology, there is always a risk of security and the potential for a cyberattack against it. That is why more users are opting to safeguard digital information using Blockchain technology. The safety and security is a growing concern among crypto traders as the new wave of hackers, frauds, and malware are quickly rising with new threats every day. Your security habits are the only things that will keep your information safe while managing your money online.

Password Management

Passwords play a strong role in online security. While there are plenty of cryptocurrencies for you to invest in, you might want to consider using a number of wallets for separate accounts. Why spend more on multiple sources to invest in cryptocurrency? Having separate accounts will give you a range of rates and a higher chance at the best options. Most investors tend to use multiple exchanges that will help you earn a nice profit and exchange your digital coins.

Whether you choose to open four accounts or ten, having multiple accounts will also mean having separate passwords. Don’t make the same mistake as Mark Fraunfelder, who lost $30,000 worth of Bitcoins after he forgot the password to his own wallet. To prevent yourself for a similar situation, using a password manager offline will help you stay on top of all active accounts. All it takes is a single password known as the “master password.”

After that, the rest of the passwords will be randomly generated and highly secure. They can even be changed in the event of a potential data theft or cyber attack against your wallet. Furthermore, your data will be encrypted and allow you to access it with your master password.

2-Factor Authentication

Having a strong password is not enough protection against serious cyber hacks such as a Brute Force attack. With a Two-Factor Authentication (2FA), you can prevent such scenarios by adding an extra layer of security. This will require a password with information that only the user will understand. It can range from a token number sent to your smartphones or a one-time code sent to your email.

Not only will the 2FA make it harder for attackers to steal your information, they will also have no chance to access your smartphone or email address. Users will have three options for authentication, such as the factors of:

  • Possession: Factors that are known only to the user, such as a PIN, password, or answers to personal questions.
  • Knowledge: Factors that are physically present, such as a smartphone, token number, or a valid ID card.
  • Biometric: Factors that relate specifically to the user. These could be inherence factors, which are personal attributes such as the face, voice, or fingerprint of the user. They may also include such patterns as keystroke dynamics.

Web Extension

If you are not aware of malicious websites, now is the time to do your research. Spoofed websites are fake sites that will trick you into believing that you are on an actual webpage. Once you attempt to log in to those websites, you are immediately handing out sensitive information without even noticing it. Using a protective web extension like Cryptonite from Google Chrome will keep your information protected from fake sites on the web. It will also come with a toolbar that turned green every time you visit an authentic website or social media account that has been verified.

This will give you peace of mind and save you the hassle of conducting background checks for every cryptocurrency website you search. What’s more, this extension only works for cryptocurrency websites and accounts on social media. Any other website will not be triggered however, it will also maintain a database of recognized websites and block them immediately.

Anonymous VPN or Tor Browser

Aside from password managers, fraud site blockers, and extensions, you will also need to secure your IP address. One of the first things a smart hacker will steal is your IP address when trying to hack your system. Using IP tools will randomize your address and will come in handy, especially if you travel. For those who travel or use a public Wi-Fi to connect online, using a Tor browser or VPN will help hide your browsing history and keep you safe from prying eyes.

Tor browsers are the best network tools to stay anonymous on the web, simply because Tor will route your signal through a variety of nodes, where each node will know the IP address of only the adjacent nodes. As a result, no one will be able to exploit the chain details and reach your personal IP address.

Every digital investor has a special set of goals in cryptocurrency, but whatever your goals online safety measures must be taken. Be sure to consider the fees, accessibility, and liquidity as well as your own safety when choosing a platform for your exchange.

The Author

Lucy Gregory

Lucy Gregory is a professional freelance writer with many years experience across a variety of sectors. She made the move to freelancing from a stressful corporate job and loves the work-life balance it offers her.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

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