Complete Guide on Cryptocurrency Security

• Anshika Bhalla
• September 03, 2023

Cryptocurrency has been in hype since the release of Bitcoin. Now Bitcoin and Ethereum are the top two cryptocurrencies that you can invest in. However, it’s not always safe to invest in digital currencies. Therefore, before stepping your foot into the crypto market, you must have proper knowledge about cryptocurrency trading, or you could consult a crypto advisor. Also, one must understand the factors that affect cryptocurrency security. Is cryptocurrency secure? How can I protect my digital investments? And what are the cryptocurrency security measures? All these questions have somehow struck your mind when talking about investing in cryptocurrency. Therefore,  we will be discussing all about cryptocurrency security which can help you in investing and trading digital currencies in a better way. 

Blockchain technology is best known for its cryptocurrency. It provides a secure platform, and that is why it is used by many organizations worldwide. Blockchain technology created a secured digital ledger for cryptocurrency transactions which keeps the hackers away (mostly). However, this doesn’t make it immune to hackers and cyber-attacks. Unlink banks, in the crypto market, if the money is lost, it is gone forever. That is why it is always recommended to invest in cryptocurrency only the amount you can afford to lose.

Nevertheless, if you have excellent skills in analyzing cryptocurrencies or having cryptocurrency certifications, you are good to go. These certifications will help in trading digital assets. You can have an online Degree in Cryptocurrency and Trading and be a Certified Cryptocurrency Expert or Trader..

What is Cryptocurrency?

Cryptocurrency can be defined as a virtual currency secured by cryptography. Most of the cryptocurrencies are based on blockchain technology.  It allows online secure payments, i.e., digitally known to be tokens. It is a fast transaction process with reduced transaction cost. Also, most of the cryptocurrency works on decentralized networks, which allows it to run independently without any central or government authority. 

You can also purchase, trade, or invest in Cryptocurrency online using crypto exchanges. Some of the famous and secured exchanges are Binance, Coinbase, Kraken, etc. Before exploring the cryptocurrency exchanges, you must know a deep knowledge of the trending technology behind the crypto market. The most popular cryptocurrencies in the market right now are  Bitcoin, Ethereum, Binance Coin, and Cardano.

Is Cryptocurrency Secure? 

Blockchain is the technology behind cryptocurrency. The backend process for cryptocurrency transactions is quite complex, and the transactions are recorded into the blocks and time-stamped. Due to its complexity, it is very hard for hackers to get through, making the cryptocurrency pretty secure. 

Also, cryptocurrency can become more secure by taking some measures, which we will be discussing further in this article. For now, some basic things must be considered like, a two-stage authentication process while making cryptocurrency transactions. For example, at the time of processing transactions, you need to enter a username first and a verification code that is sent to your personal smartphone via text or email. 

This type of security is just not enough; therefore, companies and investors make sure that they invest or even open their own cryptocurrency. They must be aware of the cryptocurrency security standards. 

Cryptocurrency Security Standards

What are Cryptocurrency Security standards? It is a set of security requirements for the systems used for cryptocurrency. This includes cryptocurrency exchanges, mobile, and web applications. For increasing cryptocurrency security, it is better to have an information system having cryptocurrency Security standards. This helps to manage and standardize the techniques and perform methods to a particular system for security. Cryptocurrency Security Standards (CCSS) allow the end-users to make smart choices and decisions for purchasing and investing in the right services.  Also, the Cryptocurrency Security Standards CCSS helps the customers and investors to make good decisions when allying with the companies. 

Mostly, Cryptocurrency Security Standards (CCSS) have ten points that are fulfilled while setting up cryptocurrency security systems.  It is a 10 step security put up in 3 levels. Thus the standard is followed by most cryptocurrency exchanges. 

The following are the steps that most blockchain companies and organizations follow, and investors must invest in the services of companies following the Cryptocurrency Security Standards:

• Key/seed generation
• Wallet Creation
• Key Storage 
• Key Usage
• Key Compromise policy
• Keyholder Grant/ Revoke Policy and Procedures
• Third-party audits
• Data Sanitization Policy
• Proof of Reserve 
• Log Audits

How to Protect your Digital Investments? 

It is crucial to protect your digital assets, and for that, you must imply cryptocurrency security as it gives the fundamental security aspects. As the cryptocurrency services do not offer a security level as banks, certain risks and precautions must be looked over and implemented while investing in cryptocurrency.  

Cryptocurrency security offers safeguards for your crypto assets. It also allows you to trade and invest in cryptocurrency safely. However, there are some things that can be taken care of at a personal level. Few mistakes from your end can save you many dollars or coins. That means there are some risks that you can overcome with proper knowledge about cryptocurrency trading. You can check out cryptocurrency certifications and courses online on blockchain council.  

Risks that occur are as follows-

1. Leaving cryptocurrency on a single exchange making it more prone to hackers.  
2. Keeping Cryptocurrency locally can have consequences like data can be lost or stolen, as local storage is vulnerable, and someone can track down your transaction and steal it. 
3. Another risk is when someone targets you specifically, then Email phishing attacks are prevalent. Also, some standard methods and techniques leading to personal attacks like SIM Swap assaults for clearing the 2-way authentication are used.
4. Cryptocurrency can be lost due to a natural disaster or by any accident. With these unexpected accidents, billions of dollars are the estimated digital currency that has been damaged. However, this cause is usually overlooked by many investors. 
5. Another risk that can damage your digital assets is not distributing them to the beneficiaries, which means loss of generation wealth. This comes in the limelight if the person has a sudden death or any complication. We usually don’t think about this. Still, when stepping your foot in the crypto world, it’s essential to take account of all the possibilities. 

How to Protect your Digital Investments?

Cryptocurrency is the major application of blockchain technology, and many professionals use this digital currency to buy goods and services. Therefore, it is essential to protect your digital assets and to keep your cryptocurrency secure. Also, before investing in cryptocurrency, there are some points which you must consider and follow. 

• Thorough Run Research on Exchanges

Researching is the first step before investing your time and money into the crypto market. So, learn and understand cryptocurrency exchanges. There are numerous exchanges in the market where you can sell and purchase cryptocurrency. Exchanges are the platform that allows people to do cryptocurrency trading. Therefore, if you plan to start your crypto trading, do your homework, google it, or consult crypto advisors, you must also check reviews of each cryptocurrency exchange and contact experienced investors or cryptocurrency traders. After having proper knowledge, make the decision accordingly. 

• Store your Cryptocurrency Safely

Another important point for investing your money into cryptocurrency is to store your cryptocurrency in a wallet but keeping it safe is a challenge. Now, every digital wallet has its own features, security standards, technology used, and advantages. Therefore, it is important to include all these factors and then choose the best-suited wallet as per your security needs. 

• Using a Hybrid Strategy will be a wise investment

As most of the wallets are online and gaining popularity, they have become a good investment option. However, hackers look for these types of wallets. Therefore, when it comes to consumer’s cryptocurrency, they use offline wallets for cryptocurrency storage and only a little amount is kept online. Users must keep separate their public and private key for their deposit box where cryptocurrency is stored. 

• Use a strong password 

Always keep the password solid and different. Never repeat a password that you have used for another account. As cryptocurrency is prone to cyber-attacks and hackers attack the accounts with low security. Always have two-way verification before logging in and also keep changing the password after few months. 

• Use trustworthy wallets

You must do trading in cryptocurrency through authentic and reliable wallets, brokers, apps, and exchanges. Do not put your money blindly. Invest in exchanges and wallets which follow the cryptocurrency security standards. This includes 2 stage authentication, SSL/TLS encryption, and keeping air-gapped devices offline. 

• Keep the key secret 

When sending or receiving digital currency, a secret key is used. The ower owns that key which is required to enter before processing any transactions. Therefore, the user must keep that key secretive and do not disclose it to anyone. The private key is very important, and thus it is required to be stored somewhere safe. 

Steps to prevent Your Cryptocurrency from Cyber Attacks  

Cryptocurrency is a profitable investment when done in the right way. Also, having extensive knowledge plays a vital role in Cryptocurrency trading. Also, cryptocurrency security systems must be included, and some serious measures must be taken to avoid common cyber attacks. 

• Try to avoid storing cryptocurrency on digital storage.
• Invest in buying a cryptocurrency hardware wallet.
• Do not use public wifi while making transactions.
• Use private and secured internet connection. 
• Also, make sure to keep the security level high and do not install any unsecured apps. 
• Use 2-stage authentication and verification for better secure transactions. 
• Make sure to stay away from the bitcoin gambling sites. 
• Hold cryptocurrency privately.
• Put a unique and robust password.  
• Do not share your passwords, key, and wallet details with anyone.

Cyberattacks are very severe, and investors must follow these basic and easy steps at their level to avoid any loss. Also, with the increased demand for cryptocurrency, investing in high-end security systems will be a significant long-term investment. 

Cryptocurrency Security Measures

Following the security measures strictly can save your cryptocurrency from any fraud, loss, accident, etc. However, making the right decision can lead you to high profit, whereas a single and minute mistake can bring you losses. When dealing with a critical technology prone to cyber-attacks and a target of hackers, cryptocurrencies must be handled with proper security.  

Some of the ways by which you can secure your crypto investments are as follows:

• Cold Wallet is a better option as it is not connected to the internet. 
• Using secured Internet Network 
• Maintaining multiple wallets
• Ignore phishing Mails 
• Keep changing your password
• Make sure to update your devices with the latest software
• Also, have antivirus software to protect your device from viruses and malfunctions.
• Keep your keys separate and with high security.

These few points can make your digital assets secure and away from cyber attacks. Also, make sure to invest in multiple cryptocurrencies and do not hold on to a single currency. There are many cryptocurrencies in which you can start investing. Moreover, it is recommended to invest in stable coins like Tether (USTD), DIA, Paxos Standard (PAX), US Coin (USDC), etc., at the beginning for a safer side. 

Conclusion 

We have covered vast knowledge about cryptocurrency security, Measures to secure cryptocurrency, Also, how you can secure your digital assets using the right exchanges and digital wallets. We also covered storing cryptocurrency in physical wallets. Understanding the concept of securely trading cryptocurrency is very important in order to gain profit from it. If you wish to learn more about cryptocurrencies, trading, investing and dealing with digital assets, check out the blockchain council and explore cryptocurrency courses and certifications. You can also be a crypto advisor or a certified cryptocurrency expert.