Bitcoin is not immune from threats and risks, but there are effective ways to remain safe while trading bitcoin. Like other digital asset markets, the virtual currency market has its own safety and security issues. Many experts consider bitcoin less secure than other cryptocurrencies. The next best digital currency after bitcoin is considered to be “Ether”. The ETH is more secure and protected from hackers than bitcoin, but when it comes to return and market capitalization bitcoin is the market leader.
The debate regarding cryptocurrency’s anonymous nature and the decentralized system have raised questions regarding safe investment. As people rush towards bitcoin to make profits, many are not fully aware of vulnerable aspects. No doubt that bitcoin investment can make an investor wealthy within a short period of time, but on the other side, possibilities of theft and scams are there too.
If one knows how to remain safe and secure while trading bitcoin, it would reduce the possibility of being scammed or robbed by hackers.
The use of cold storages
There are several online digital currency trading platforms like “The news spy” that enable its users to trade online. It would be wise to keep your bitcoin safe and secure which you could use some time in the future to make an earning. Many professional crypto traders prefer to secure their private keys in cold storage in order to avoid online attacks. Private keys would be more secure offline in hardware wallets and chances of theft are reduced to the maximum extent.
Deal with counterparty risk
Among the risks involved in trading bitcoin, counterparty risk is the most adverse one. Even the best trading platforms could be hacked and traders can do very less in claiming refunds. In order to avoid the risk involved in bitcoin trading, it would be wise to manage the money in the most appropriate way. The idea of huge chunks of investment all together is always discouraged for crypto traders and it raises the level of risk.
Use strong passwords
As social media accounts encourage you to put strong password keys in order to secure your privacy. The use of simple passwords or common passwords increases the ease for hackers to attack. A strong password that includes numbers, capitals, signs, symbols would be more difficult to crack. Hence it is strongly suggested not to set weak passwords for your virtual currency account.
Sending or receiving bitcoins
One of the common mistakes many traders make is that while sending and receiving bitcoins, the address is not checked properly which results in misunderstanding and loss of coins. It would be wise to double-check the address at which bitcoin is sent or received. This would reduce the chances of mishaps and loss of money.
Two-factor verification process
The use of two-factor verification is quite common nowadays. It is the best way to secure your account from fraudsters and hackers. When you will activate two-factor verification, every time you try to enter your account from anywhere and with any device, you would enter a new password (secondary to the existing one). This would make your account even more secure.
Reliable trading platform
This is the most important aspect o consider while trading bitcoin. In order to stay on the safe side, it would be recommended not to select any online broker without proper research. There are several platforms that have been caught by the authorities, who deliberately went bankrupt and many investors and traders faced loss.
Go through a couple of exchanges, make an analysis and select the most appropriate one. Read the reviews regarding the platform that you are about to choose, if anything that you find ambiguous, try to avoid that platform. There are some globally recognized platforms like Etoro, Binance, prime XBT, and CoinBase.
No technique or method could completely eliminate the risk of scams and theft, but efforts could be made to reduce the chances. Hackers and fraudsters are always looking forward to finding new techniques to attack bitcoin accounts, hence it is recommended to stay updated about the new scams and ways to avoid them.