The popularity of Bitcoin and cryptocurrencies in general reached record highs in 2023, and investors in their large numbers are now reaping the rewards. Although there are plenty of questions regarding the viability in the long term, as well as the overall benefits of making cryptos your main source of income, it cannot be said that many people didn’t make vast fortunes from it.
Cryptocurrency is the place to be right now, and it has been for well over a decade. While many records were achieved in 2023, it is still not everything Bitcoin and others have in store.
However, one aspect of crypto people have been overlooking the most is the risk that comes with investment, and we are not talking about losing your capital here. Although this has been discussed widely, what we are talking about is being scammed, duped, or outright robbed in the treacherous world of the internet.
It is no secret that cryptocurrencies come with a lot of safety and security questions as millions are still hesitant to invest due to the fear of losing money. With that in mind, let us take a closer look at the top cyber risks associated with cryptocurrency investing. If you want to know whether or not your cryptos are safe, you have to know more about things surrounding what goes on in the industry in terms of scams.
Bitcoins are not tangible items such as money bills. The currency is only available online and like our bank accounts, it is susceptible to theft in many ways. Crypto theft is a crime on the rise on the whole, even if the chances for any one individual to become a victim are quite small. In such a paradox one still needs to take the necessary steps and protect the assets they have.
Crystal Blockchain Analytics reports that between January 2011 and December 2023, more than $1.76 billion got lost to hacks from DeFi, and over $3.18 billion from other security breaches. A lot of cryptocurrency assets are highly secure in electronic wallets that are used both to protect the balance and to do business. Access to them is only possible with private keys, which are known to wallet owners only.
Those keys resemble passwords in that they contain a string of random numbers and letters. Obviously, the owners should never give others their keys. Nevertheless, hackers know smart ways to bypass the locks of private wallets, as with any other password system. They do this through a few different ways, all of which are sadly quite successful.
This is one of the most common practices by those looking to steal away people’s crypto balance. There are many types of phishing attacks, all of which are quite troublesome to deal with. With the most common one, the hackers create websites that look trustworthy and familiar, so the unsuspecting users click on them expecting a legitimate place.
Hackers might create a website that looks like cryptocoins.com but remove the “s”, leaving you to check your crypto account at cryptocoin.com. Another way they can do this is through fake ads that resemble legitimate crypto sites, clicking on which results in your personal and financial info being stolen.
On a hacker’s website, you may enter your details or other essential information if you are not wary. Phishing may also occur through you receiving a notification that looks legitimate from a site asking to update your details. By clicking the link, you will be taken to a hacker’s site where your information can be collected and your crypto stolen. As soon as you give them the info, your crypto is no longer yours as you were taken advantage of.
You can avoid being a victim of this despicable act by using reliable platforms that have been recommended by people you trust, and those that have a good reputation in the industry. A good example of a platform like this is Bitcoin Up. You can get the app easily by downloading it from bitcoinupapp.com/. Save yourself the avoidable trauma of loss and remain protected as long as you do crypto business. The platform is one of the best secured you can get which will give you all the peace of mind you can hope for.
The idea behind two-factor (2F) authentication is for companies to improve their cybersecurity by requiring you to answer to notifications on your email or phone whenever someone is trying to access your account. Hackers can circumvent this system by convincing your phone company to change your number to their SIM or cloning your SIM card. It seems like too much hassle for them but make no mistake, they are quite efficient with this approach.
Having accessed your account, they can confirm the legitimacy of the access to the account by logging in from their end. Once this happens, it seems like you are the one who logged in. However, this is what it looks like from the outside and to anyone else but you. Your account is no longer yours but the platform that you had it on knows nothing of the theft that occurred.
Scams in the world of cryptocurrencies have caused consumers to lose even more money than having their crypto stolen. From January 2011 to December 2023, Crystal Blockchain Analytics data says that losses that occurred because of crypto scams is valued at more than $7.21 billion.
Keep yourself protected from cryptocurrency scams by learning about the recent ways through which criminals try to siphon money from people’s crypto accounts. The ultimate goal of every crypto businessman, big or small, should be to protect their assets at all times.
Pump and Dump
There is nothing new about pumps and dumps in the age of cryptocurrency. This is an ancient trick in the book of stock market manipulation and anyone who has dealt with stock investments can tell you about it. Some kind of authority will show up and deem a certain crypto token as “the next big thing.” As more people talk about it, more investors pile around the cryptocurrency and throw money at it. The faster the price rises, the more attention and the more investors the new token gets.
It is not important whether or not the token is actually useful or if it makes sense to invest in it. As soon as the price has climbed significantly, the main person to promote the crypto will dump their crypto, sending the price plummeting and ending the mania. They are left with all the money that the investors have put towards the crypto and nobody can do anything about it. This is a very popular practice in the crypto world, particularly because there are now thousands of cryptos in existence.
Conclusion and Takeaways
As you can see, trading cryptocurrency or even just holding it in your electronic wallet is far away from being safe or secure. There are many easy ways through which your crypto account can be accessed and stolen away from. As a holder, it is expected of you to securely keep your private keys so nobody can easily have access to your account.
If that can be achieved, then your account will be safe. Even then, you can never be too sure which platform is rela and which is a scam. Apart from keeping your login info to yourself, make sure not to trust shady platforms and only deal with those who have proven their legitimacy.