How to Keep Your Cryptocurrency Safe from Scams and Hacks

The continued rise of decentralized finance (DeFi) has meant these digital currencies are being used more than ever for peer-to-peer transactions and borderless payments, turning them into a viable investment vehicle, just as many early supporters have claimed.

In particular, privacy coins like Monero (XMR) stand out as particularly appealing for those who want to use cryptocurrencies as money. Thanks to features such as untraceable payments, hidden wallet balances, and integration of better security like those on a dedicated Monero wallet, these coins are powerful tools for users who see the future of cryptocurrencies as bona fide replacements for fiat money.

Still, even though crypto coins are finally coming into its own as cash replacements, it can’t be denied that cryptocurrencies are still exciting investments in their own right. Every day, new investors are being drawn to cryptocurrencies with the hope of becoming wealthy by picking the right coins and timing the market just right.

However, newbie investors are exposing themselves to far more than just market risks when they trade crypto. Despite the security of blockchain frameworks, many crypto coins expose user identities through their transaction histories, compromising the anonymity needed for meaningful safety. This sort of exposure makes traders and those close to them vulnerable to phishing attempts, social engineering, and even targeted attacks.

To protect your assets, it’s time to begin adopting a realistic approach. Here’s how you can stay safe from phishing sites, fraudulent investment schemes, wallet compromise tactics, and other common tactics employed by crypto thieves.

1. Use a Hardware Wallet 

Anything that connects to the internet can, in theory, be compromised by hackers. Hardware wallets sidestep this issue by storing your private keys offline, dramatically reducing your exposure to online threats. Being offline, these devices are practically invulnerable to malware attacks, making them a great option for long-term storage.

2. Prioritize Privacy Coins for Greater Security 

For various reasons, many coins do not provide true anonymity. In many cases, it’s possible to deduce who a user is based on the information available on public ledgers. If you’re interested in avoiding this exposure, privacy coins like Monero provide more layers of protection through anonymized transactions and hidden balances.

3. Diversify Your Storage Solutions

While hardware wallets are generally great for security, they are not without their issues. Disasters like house fires, hardware failures, or even a spilled drink can compromise such a storage device, making it important to think ahead. Whenever possible, spread your assets across multiple hardware wallets, mobile wallets, and custodial exchanges to reduce the risk of a total loss. Be sure to back these up periodically to further minimize your risks.

3. Follow Well-Established Security Best Practices

Thankfully, all you need to do to significantly reduce your funds’ risk from attacks is to follow conventional best practices. Such common sense moves as enabling multi-factor authentication and using a strong password will already ward off most of the typical attacks employed by hackers. For even better protection, you can also consider using a wallet with additional security features.

4. Keep Software and Wallets Updated 

Developers will often offer security patches to address known security threats. Ensure your wallet software, operating system, and antivirus programs are up to date so that hackers have fewer vulnerabilities to work with.

5. Beware of Social Engineering and Phishing Attacks

Even though technical safeguards are important, you must remember that most successful cyberattacks employ some kind of deception to attack the weakest part of the crypto chain: you. Scammers often impersonate trusted individuals or customer support agents, so you should never share your private keys, seed phrases, or account information under any circumstance. They may also set up convincing fake websites to capture your login info, which means you’ll want to bookmark trusted platforms and avoid clicking on unknown links, especially over chat or email.

6. Never Use Public Wi-Fi for Crypto Transactions 

Data shared over public Wi-Fi networks can be intercepted by unauthorized parties. Even if you have data encryption enabled, that is no guarantee that the hackers who are standing by have no way to decrypt your info. If you have to trade in public, use a Virtual Private Network (VPN) when accessing your crypto accounts.

7. Be Extra-Skeptical of High-Return Promises 

There’s no denying that there are some great opportunities in crypto, but scammers often depend on investor exuberance to get their victims on the hook. As such, it’s best to thoroughly vet any new projects and platforms before you put out any money. In particular, look for transparent teams, whitepapers, and verifiable use cases, as scammers will rarely be able to provide these convincingly.

Smart Choices Mean Safe Trading

Despite earlier fears, the now-mature crypto space has already proven itself to be full of tremendous opportunities. However, its successes have also given rise to a new breed of malicious actors who are adept at playing upon the fears and ignorance of new crypto investors. With these tips and strategic investments, you’ll be well on your way to a smarter—not to mention safer—trading experience.