As eager investors jump into cryptocurrency to partake in wealth creation or avoid missing out, learning about how to safeguard their digital assets is paramount.
Bitcoin and other cryptocurrencies live on the blockchain, a form of digital transaction ledger. Cryptos are decentralized digital currency, meaning they do not have a central authority such as a bank that can monitor transactions. Rather, they operate on a peer-to-peer exchange network where transactions are validated by members in the decentralized network, also known as miners. Even though blockchain has a good reputation for security, blockchain is not free from vulnerabilities.
For example, Badger DAO, a decentralized finance app, suffered a hack where users lost $120 million worth of funds from its platform. This crypto hack was a result of a phishing incident where the front end of the platform was compromised, resulting in malicious transactions.
Novice crypto investors who are still learning best practices to manage their digital assets need to understand that they have some of the responsibility in managing the threat of a crypto hack. Actions crypto investors can take include choosing a crypto exchange that works best for their investing or trading needs, selecting a crypto wallet that properly secures digital assets, and taking security measures when interacting on exchanges.
Addressing these many considerations can be a difficult task, but here are the key items you need to know to be a successful – and safe – crypto investor:
Bitcoin and other cryptocurrencies live on the blockchain, a form of digital transaction ledger. Cryptos are decentralized digital currency, meaning they do not have a central authority such as a bank that can monitor transactions. Rather, they operate on a peer-to-peer exchange network where transactions are validated by members in the decentralized network, also known as miners. Even though blockchain has a good reputation for security, blockchain is not free from vulnerabilities.
For example, Badger DAO, a decentralized finance app, suffered a hack where users lost $120 million worth of funds from its platform. This crypto hack was a result of a phishing incident where the front end of the platform was compromised, resulting in malicious transactions.
Novice crypto investors who are still learning best practices to manage their digital assets need to understand that they have some of the responsibility in managing the threat of a crypto hack. Actions crypto investors can take include choosing a crypto exchange that works best for their investing or trading needs, selecting a crypto wallet that properly secures digital assets, and taking security measures when interacting on exchanges.
Addressing these many considerations can be a difficult task, but here are the key items you need to know to be a successful – and safe – crypto investor:
- Can the blockchain be hacked?
- How to safely store crypto.
- Cold versus hot wallets.
- Tips to prevent cryptocurrency theft.
