Although crypto enthusiasts have been buying and selling Bitcoin and other cryptos since 2010, buying your first cryptocurrency is exciting. With over 400,000 transactions happening daily on the various crypto-trading platforms, there is no better time to get into the business than now.
While cryptocurrencies are exciting, they are marred with numerous reports of hacks, scams, and nefarious activities, so you should be ultra-cautious when buying and selling the currencies.
How do you ensure you are safe as a cryptocurrency investor or trader? Here are the safety precautions you should take:
Buy From A Reputable Source
There are plenty of ways you can buy your cryptocurrencies. The most common ones include:
These have one or plenty of cryptocurrencies to choose from. All you need to do is log in to them and buy the currency you are interested in. These platforms come with fees, so be ready to pay for every transaction you undertake. Thankfully, they are usually safe to buy from them.
To stay safe, buy from an exchange provider with a proven track record, such as Bitcoineer.
They function like regular ATMs, but they give you the option to buy and sell crypto. When purchasing from them, ensure they are genuine, so you don’t lose your money.
Peer-to-peer Crypto Owners
Here, you buy the crypto directly from other crypto owners.
You can also buy crypto from traditional stockbrokers, grayscale, and exchange-traded funds. Regardless of where you buy from, ensure that the platform you use has proven safe.
If you aren’t sure, check online reviews. You should note that no platform is perfect, so expect to have some negative reviews even on the most reputable platforms.
While this is the case, you should always avoid a platform with plenty of negative reviews, as that’s a clear sign they aren’t reputable, and you will most likely lose your money if you buy crypto from them.
Most people buy their first cryptocurrencies from crypto exchanges. If you opt to go this route, ensure that the exchange you choose accepts users who comply with Know Your Customer (KYC) and Anti Money Laundering (AML) requirements.
This is because you have fewer chances of losing money when the exchange complies with these regulations.
To sign up for the exchange services, you must provide your private information, such as your full name, email address, mailing address, and phone number.
While giving this information makes you lose some of your privacy, it helps support the KYC requirements that keep your currencies safe.
Store Your Currencies In A Safe Wallet
After you have safely bought your cryptocurrencies, the next step you should take is to ensure that you store them in a safe wallet. Wallet options you have are cold and hot wallets.
With a hot wallet, a trusted exchange provider stores your crypto there, and you can access the currency through an app or computer browser. All trading exchange companies provide free crypto wallets where you store any coins you buy.
While these wallets are free, they are a hotbed for hackers, so you should be ultra-cautious when storing your currencies there.
To minimize the risk, download a genuine wallet from the developer’s official website.
On the other hand, cold wallets are small, encrypted portable devices that allow you to download and carry your crypto. Unlike hot wallets, these come at a fee (usually less than $100) and are much safer than hot wallets.
Whether you are using a hot or cold wallet, always use a strong password and two-factor authentication.
It’s also wise to back up your wallet. This calls for you to write a series of unique words that make up the recovery phrase.
Avoid Public Wi-fi Networks When Making Transactions.
Public Wi-Fi networks are attractive as they save your data. Unfortunately, they aren’t secure, so hackers can easily intercept your data while on the free network.
If you have a hot wallet, don’t get into it using the airport or restaurant Wi-Fi, as you will expose your valuable information.
If you have to use these public networks, ensure that you use a Virtual Private Network (VPN). The VPN creates an encrypted tunnel between your device and the internet, making it hard for hackers to intercept and steal your data.
There are many VPN service providers; you need to research and find the one that gives you the best experience.
Be Cautious Of The Website You Are Logging Into
Scammers often create fake websites that resemble legitimate ones, but with a minor difference, usually in the URL, you can’t pick unless you are ultra-cautious.
If you have to log into your exchange’s website to transact, be cautious of the website you use, as you can easily put your data on a scammer’s site. They steal not only your information but also your cryptocurrencies.
You should always use the official website. In most cases, it will be the first site in the organic search results.
Sometimes even the original site can be hacked. If you get on the developer’s site and feel something is off, check for any news on the various crypto news sites.
You can also check whether the site is hacked using the lock icon on the URL. If the site has been hacked, it will usually fail the SSL certification, so the lock will appear red. Your browser will also warn you about the unsafe site. As a rule of thumb, don’t enter your details on a site you aren’t sure about.
It’s also always wise to check the contact addresses. If you have to call to approve a transaction, ensure that the details in your wallet are similar to the ones mentioned in the developer’s documents. This way, you don’t approve a trade that goes to the wrong party.
These are some of the ways you can be safe when you are dealing with cryptocurrencies. Besides the above tips, also be ultra-cautious of emailed files. As a rule of thumb, don’t open files or click on links you aren’t sure about.
If you didn’t expect a download, then you get a notification that your file has arrived, you have a reason to worry and always don’t open the file.