Cybersecurity in Crypto: How to Prevent the Main Risks?

Introduction

Cybersecurity is an essential part of any crypto project. It’s important to understand how these threats work and what can be done to prevent them from happening.

Cryptocurrency and crypto assets are very appealing to cybercriminals.

Cryptocurrency and crypto assets are very appealing to cybercriminals. They are a relatively new and exciting technology, digital money. For the past few years, cybercrime has been booming with the rise of cryptocurrencies. We have seen ransomware attacks increase dramatically, followed by other types of malware related to cryptocurrency mining, such as cryptojacking.

However, it’s important to note that not all forms of crypto-related cybercrime are malicious in nature; some people use them for legitimate purposes (such as paying for goods or services). However, there is still a significant risk that bad actors can exploit these platforms to steal personal information from individuals who aren’t aware of how best to protect themselves online through cybersecurity measures like two-factor authentication (2FA).

The majority of crypto wallet owners don’t use two-factor authentication (2FA).

Two-factor authentication, or 2FA, is the most effective way to secure your crypto wallet. All you need to do is enter an additional code that is sent to your phone when logging in with your password on a new device. This extra step makes it much harder for hackers and other unauthorized people from gaining access to your account.

But how exactly does two-factor authentication work? In short, every time you want to log in from a new location or device, the system generates a random code and sends it as a text message or voice call (depending on the type of 2FA) directly to your phone number or email address linked with your account. After entering the code when prompted by an app like Google Authenticator—which comes preinstalled on Android devices—you’ll gain access without having risked exposing sensitive data stored on any of those devices by using them as entry points into accounts where they might not belong

Phishing is a type of scam that aims to get the victim to willingly hand over private information. The most common form is an email containing a link that takes the user to a fake website, where they are asked to enter their crypto holdings on a site controlled by phishers.

The email is designed to look like it comes from a legitimate source in order to trick users into clicking on the link and handing over information. There are many ways scammers can do this, such as using logos or other elements from existing companies, or even creating websites that resemble real ones.

Many exchanges have suffered data breaches and thefts, losing users’ assets or personal information.

  • Example 1: A hacker stole $70 million in Bitcoin from the Bancor exchange.
  • Example 2: A cryptocurrency trading platform headquartered in Japan lost $60 million to hackers who were able to access and transfer funds from users’ accounts.
  • Example 3: The South Korean cryptocurrency exchange Coinrail lost around 30% of its total coin valuation after a hacking attack earlier this year, which also saw personal data stolen as well as other assets like Bitcoin, Ethereum and Ripple taken away by criminals.

One of the main reasons why people lose their money is a lack of cybersecurity knowledge.

One of the main reasons why people lose their money is a lack of cybersecurity knowledge.

They don’t understand the risks, how to protect themselves, or how to recover from an attack. This can be fatal for someone who doesn’t know what they’re doing and is just trying something new because it seems cool or trendy.

Even if you have an exceptional idea, no investors will invest in your project without proof of your identity or business verification

You may be wondering how you can prove your identity if even banks do not trust it. In the case of cryptocurrencies, however, the idea of ​​proof is different: it’s all about proving that your public key belongs to a specific person.

That’s where KYC (Know Your Customer) comes in handy: through this procedure, investors can verify that any given user has real money and does not intend to commit fraud. How does this work? The first step in verifying KYC is providing personal data, such as passport details or proof of residence; after that, the investor must confirm his identity by uploading a photo of himself holding his ID card or driving license next to him. After passing these steps successfully, you will receive an identification number from which all future transactions will have access via a password generated by blockchain technology.

Conclusion

Clearly, cybersecurity is an essential concern in the area of cryptocurrencies. It’s a complex subject with several factors to consider. Nevertheless, there are easy actions you can take now to make your digital currency wallet more secure and lower your chance of being hacked or losing cash in a cyberattack.