At the beginning of 2009, a person or group using the pseudonym Nakamoto released Bitcoin, and people started to exchange and mine the digital currency. By the end of 2010, similar currencies such as Litecoin started to make an appearance.
Cryptocurrency is a virtual currency and is not regulated by any government. It is considered an alternative currency and a digital medium of exchange that is not bound by state monetary policies. Cryptocurrency is underpinned by cryptography, which is secure and hard to counterfeit. However, cyber-criminals have found ways to steal funds from unsuspecting investors using tricks like:
Crypto-ransomware is a common trick used to extort money from unsuspecting victims. The criminals scramble or encrypt your crypt—files and demand for a ransom in cryptocurrency, assuring them anonymity. Once the ransom is paid, the criminals should send you a decryption key, which sometimes does not happen, and you lose on both ends.
Phishing is a type of common social engineering attack where malicious entities pose as trusted entities to deceive victims into divulging their sensitive information such as usernames, credit card details, and passwords. Phishing psychologically manipulates victims and relies on the gullibility of humans.
Crypto-phishing attacks are now rampant in the cryptocurrency ecosystem. The malicious actors attempt to steal cryptocurrencies from unsuspecting users. They can do this by spoofing real websites and changing the legitimate wallet address to their own, making the users think they are paying for legit services while, in essence, they are being robbed.
In a report by CipherTrace, cybercriminals in 2019 siphoned $4.26 billion from cryptocurrency exchanges and users. Crypto-scammers have become more overt in their dealings, to the extent of making ads on the media. YouTube has been sued for the promotion of crypto-currency ads, while Google also continues running ads of fraudulent ads via its ad network.
Ways you can protect your crypto-wallet
Protect your investment by taking these measures:
Installing a VPN
A Virtual Private Network (VPN) is a master at encryption. First, it keeps your exact location and IP address hidden by allocating you to a virtual location. Accessing your crypto-wallet online makes you vulnerable to malicious actors, and instead of installing a free VPN, you should consider buying a VPN from a reputable service provider. Free VPN providers have been accused of selling data to third parties, and you do not want to take that risk.
Use a multisignature address.
A multisignature address also known as a multisig address, is a permission slip that permits you to do your digital transactions securely and avoid fraud incidences. A multisig address uses more than one key to authorize any transaction in your crypto-wallet. This may mean looking for two or more people who will hold the other keys but cannot access your funds without your knowledge.
Subscription to a secure email service
Protect your data and emails via a subscription to secure email service. A secure and efficient email service provider improves your security by providing:
- End-to-end encryption
- Restrictions on security
Using a strong wallet password
When transacting via an online wallet, pick your password with care. Obvious passwords such as phone numbers or pet names are not acceptable. Instead, use alphanumeric characters that are impossible to guess. Make the password simple, yet unique, which ensures that even if the malicious actors use brute force, they cannot crack it.
Your private keys are thus named because they should stay private. Do not share the keys with anyone or ask the third party to transact on your behalf. There is no difference between your crypto-account and your fiat currency account.
By all intents and purposes, cryptocurrency is supposed to be unhackable. However, technological advancements have made it easier for hackers to steal people’s hard-earned investments. To mitigate these attacks, follow these safety measures and keep your cryptocurrency secure.