The cryptocurrency industry has grown significantly since the inception of Bitcoin in 2009. Advances in blockchain technology have increased the privacy and anonymity afforded to users, the decentralized finance (DeFi) movement has grown tremendously, and central bank digital currencies (CBDCs) offer unlimited possibilities for banks and businesses.
The reason for this growth is clear. Blockchain technology allows for more secure transactions for businesses, a reduction in costs, and streamlined supply chain communication.
But despite all of this advancement, the cryptocurrency industry is still tackling one major issue: security. There are tons of security risks involved with trading and investing in cryptocurrency, a few that are listed below.
3 Security risks behind trading cryptocurrency
Crypto and blockchain technology benefit B2B in many ways, including the ones mentioned just above: payments, communication, and many more. However, the technology is not perfect and lacks certain features or—in this case—proper security.
1. Common Crypto-Fraud
Scammers litter the Internet, tricking after user after user with contrived schemes and simple scams. Phishing scams trick even the most intelligent people, and websites manipulate users into believing they “won” gifts and rewards.
The crypto industry isn’t any different. The FBI has even gone as far as to warn that crypto-fraud is on the rise due to the ongoing COVID pandemic!
Tracing back a hack to a specific person—the hacker—is difficult, which is why hacking is a tempting career choice for people with the required skill set(s). Unfortunately, the cryptocurrency industry isn’t safe from these hackers.
Cryptocurrency trading platforms are anything but invulnerable, with many trading platforms being hit the past few years. In fact, Spanish trading platform 2gether was hacked earlier this August for $1.4m! The damage hackers wreak on crypto-users is significant—too significant to ignore.
3. Unsecured Trading Platforms
2gether is far from the only trading platform affected by hackers and cybercriminals, and it won’t be the last. This is due to the absence of security standards in the cryptocurrency industry, with many trading platforms containing some sort of fault(s).
When a trading platform is hacked, users are affected—potentially millions. This is why unsecure trading platforms are a big threat to users everywhere.
4 ways to protect yourself
eCommerce is a fragile industry. One hack—one backdoor or non-fortified piece of tech—could severely harm or even destroy an eCommerce business. And crypto? It’s not invulnerable to these issues.
However, there are ways to ensure safety and security for eCommerce sectors when using blockchain and crypto technology. These 4 tips will protect even the biggest eCommerce business. And it is essential you put these tips into practice, for they are what stands between your business and a cybercriminal.
1. Use a VPN
A perk of using cryptocurrencies is that they don’t leave a digital footprint—they’re anonymous. No one can trace them. But they don’t make your activity anonymous, an equally important factor of crypto-trading.
To fix this, I recommend using a VPN. The way VPNs work is they route your data through a VPNs server instead of the ISPs, encrypting the data and hiding the IP address. This grants you, the user, complete anonymity.
2. Use a Multi-Signature Address
Crypto-wallets offer a place for investors and traders to securely store their cryptocurrencies. However, not all of them are equally secure, and there are some you should choose over others.
When looking for a secure crypto-wallet, be sure to choose one that supports multi-signature addresses. Multi-signature addresses require multiple signatures before moving forward with a transaction, working similarly to two-factor authentication. This ensures no one can hack your wallet and make a transaction without your permission.
3. Subscribe to a Secure Email Service
If you are at all serious about investing and trading cryptocurrency, you’ll want to create a brand-new email address just for cryptocurrency. But before you rush out and create a new Gmail account, you should look into more secure options.
Certain email services focus on security over everything else. These services are for business-focused individuals or people who deal with finances often. These services make sure your emails are secure, encrypted, and don’t fall into anyone’s hands.
4. Stick with Reputable Trading Platforms
Not all trading platforms are secure, that much is true. However, that doesn’t mean there are zero secure trading platforms—just that you need to spend more time finding the perfect trading platform.
Be sure that, whatever you do, you stick with a reputable trading platform. The last thing you want is your trading platform to have a massive data breach or use your information for profit.