In the wake of a global financial crisis in 2008, cryptocurrency was born. This platform was intended for allowing people to control their own money without the involvement of third parties’ controls and fees such as governments or banks.
A person or group of people using a pseudo called Satoshi Nakamoto wrote and published a white paper titled ‘’Bitcoin: A Peer-to-Peer Electronic Cash System.’’ Up to date, nobody knows who Nakamoto was, but Nakamoto sent some Bitcoin to an acquaintance, birthing the first digital currency.
Cryptocurrency investors have faced challenges from online scams, especially during these times of COVID-19. Some of the risks of storing and trading with cryptocurrency include:
ICOs or Initial Coin Offerings are one of the ways startups and established businesses raise money without having to involve a legal body. A crypto company can use Airdrops to create a community, which acts as a platform for awarding individuals who share or like social media posts. Most of these ICOs turn out to be fake and lead to loss of investments by those who participate in the process.
A cyber-criminal may spoof a legit social media account or website and change the real URL. This tricks the site visitors into thinking they are communicating with the real account or website. This is known as crypto phishing.
In December 2018, a crypto wallet known as the Electrum wallet was involved in a phishing scam. Nearly $1 million was stolen, with the cyber-criminals setting up and leading users to the malicious servers. The servers prompted the users to private input details, where they unknowingly submitted total control of all their investments to the criminals. This scam also included a bogus wallet update, where users downloaded the update, only to realize they had downloaded malware into their devices.
Crypto ransomware is a malware used by hackers for extorting funds from cryptocurrency wallet holders. The malicious actors encrypt your wallet or the devices you use to access your account and demand ransom in exchange for the decryption key. Crypto-ransom is not like crypto phishing or crypto jacking, which works stealthily. Crypto-ransomware brazenly displays messages on your screen and uses shock and fear to make you pay the ransom.
How to protect your wallet
1. Use a secure email service
A secure email service ensures that the right audience only reads the sent and received emails. If you send unencrypted emails and someone intercepts them, the hacker can read all the email contents. If the email is encrypted with end-to-end encryption, only a person holding the decryption key can read the email. Use a secure email service to ensure your contents stay secure.
2. Use a VPN
A Virtual Private Network (VPN) is another excellent way to trade online. Buy a VPN to stay anonymous while trading, as it hides your IP address and your location. This would be essential when you connect to public networks to access or trade your assets.
3. Multi-signature address
A multi-signature or multisig address refers to using several keys for a single crypto-transaction. Multisig addresses keep your transactions secure by ensuring the other keys needed for one transaction are held separately. This means you have to look for two other people to hold the other keys, but cannot transact without your key, meaning they cannot defraud you.
Trading and storing cryptocurrencies is no longer safe from scammers who try any means possible to scam you of your coins. Stay safe by using the above tips and a massive dose of common sense. If it looks suspicious, stay away from it, primarily emails that promise you the world.