The Danger of Bitcoin: How to Protect Yourself

2017-08-17 09_20_05-bitcoin – Google Search

For years now, the value of cryptocurrencies is on a constant rise. The so-called digital gold rush is infecting everyone, and many saw an opportunity to make a lot of money quickly. However, there are also those who lost everything this way.

It is important to remember that losing everything is an equally possible option, which is why you must stay vigilant. Knowing what to do, when to do it, and what to avoid doing can make all the difference. So, with that in mind, here are a couple of things about the dangers of Bitcoin that you should remember.

You might lose Bitcoin to hackers

Hackers and scammers are constantly on a hunt for those who have something worth stealing, and bad protections around it. Bitcoin is just another thing on the list, but it is especially interesting to them, especially lately.

Most of these hacking attacks come in a form of phishing emails. Basically, a hacker will send an email or even a message on a social network, or some other way. The message that they will send will be designed in a way to sound urgent and important. There are even cases where they claim that you won some sort of prize and that you should claim it.

They will always try to pretend that they are someone else, someone who you might trust. Also, all of these messages and emails contain a link on which they expect you to click. If you do, it will lead to a fake login page. If you try to log into your account on this page, the hacker or scammer will get your login credentials. That is where things can get scary.

If you use the same credentials on multiple sites, they might make a lot of damage before you even realize what is going on. Not only that, but they can access your Bitcoin wallets and transfer all of your money. They might change passwords on accounts that they got access to, and also use those accounts to scam your friends and relatives.

This is the most often method that online criminals use to steal your Bitcoin, but it is not the only one. Still, you can prevent this by taking precautions now, before it is too late. Here is what you can do:

  • Make sure that your software has all the newest updates at all times – If you don’t watch out, you might miss an update or two. This might become a problem, especially if hackers discover the new flaws that you did not patch up by installing the updates.
  • Stay extra careful – When it comes to programs and apps that you are downloading. This is especially important to remember when it comes to wallets for Bitcoin and other cryptocurrencies.
  • Start using a password manager – Hackers might also try to guess your password according to information that they gather about you. Through the use of password managers, you can set complex passwords for each account. Best of all, you don’t have to remember them. The only one that you must remember is the password of the password manager itself.
  • Start using two-factor authentication – This is a relatively new, and very useful method of keeping your accounts safe. Whenever someone tries to log into them from a computer that your account can’t recognize, a code will arrive on your phone. If you are the one trying to log in, simply enter the code. If it is the hacker, you will know that someone is trying to break into your account.
  • Learn about techniques of social engineering -The weakest line of defense in the entire system is the user himself. Tricking a person is much easier than finding a way around the defenses, and hackers know that. Because of this, you should educate yourself on the methods that they use, and learn to recognize and avoid them.
  • Keep Bitcoin in the cold storage – This is one of the safest methods of protecting your money since the hackers can’t steal what they can’t get access to.
  • Use a VPN – VPN is a good way to hide your online actions from everyone, including even the hackers with more skill. You never know who is watching you, and following your every step online. With a VPN, you can protect your privacy, and increase your security. We can recommend using a VPN provider by the name of TorGuard. It has strong defenses, and it will keep you safe online.

Keep these things in mind, and your money will be much safer.

Do not forget your backup seed, or you will lose your Bitcoin

Losing Bitcoin to hacking is bad enough, but that is actually not the biggest reason why people lose their money. The far more likely case is that you will lose access to it yourself.

It often happens that people set up their wallet, and put some Bitcoin into it. They might buy it, or get it as payment. The next thing they know – they can’t get to it anymore. This can happen due to a majority of reasons. Those might include resetting the phones to factory settings, losing the phone, or even breaking it by accident.

Now, the wallets have predicted things like that, which is why they are giving you a way to get around such problems. Basically, you will get a seed, which is a backup phrase. It mostly contains 12 or 13 words, and it is a pretty safe way to get to your money, even if your phone is somehow damaged.

The most important thing for you to do is to not lose this phrase. Do not trust yourself to remember it. Instead, write it down, and do it right now if you haven’t already. Do not get the phrase everywhere around you, and don’t put it in online storage, on clouds, or any other type of online account. Write it on a paper, and put it in some safe place. You will be glad that you did this if something ever happens to your phone.

Best way to protect your Bitcoin? Try researching a hardware wallet like KeepKey.

You might trade your Bitcoin away

If you follow the ups and downs in the value of cryptocurrencies, you are already aware that they can be pretty sharp, sudden, and large. This might seem like a great opportunity for everyone who trades Bitcoin, and many use these ups and downs for making money.

However, it is not as easy as it seems, and only a few people actually do it. Many would rather choose to try and mine Bitcoin with special tools, then to trade it and risk losing their money. Everyone can make money when the market goes up, which is only natural. However, beating the market when it goes down is a much more difficult task.

When that happens, exchanges are the only ones that can profit, while everyone else simply loses the money. Some people try and trade Bitcoin with those who can’t access exchanges from the place they live at. However, if you want to do that, you must study the law of your country, otherwise, you might get in wrapped up in some legal issues. Learn what you have to do to make it all legal and legitimate, and you should have no problems.

Trading Bitcoin is tricky, and there are a lot of scams and similar problems around as well, which you should keep in mind if you wish to start doing it. For many, it is far more profitable to simply buy the Bitcoin and hold it. This method has made more than one millionaire over the years.

Anyway, the good advice for dealing with Bitcoin is to keep it on your personal wallet, instead of on an exchange. And also, use it when you have a need, but not in an attempt to beat the market. If you don’t have experience in that, you might lose your Bitcoin, instead of making a profit.

You might lose Bitcoin in scams

A solid rule in life is to never put all of your eggs in one basket, and you should apply it on Bitcoin managing as well. If you wish to invest money in something, you should never put all of it in one stock. In fact, you might not even want to put it all in one industry.

Investing outside of the internet is a bit easier and safer since you pretty much know whom you can trust. Regulators will only list real, legitimate companies. That way, whether you make a profit or not depends on your own knowledge, skill, and ability to read the market.

However, things get more complex when it comes to cryptocurrencies. Scammers are using the confusion, as well as the fact that anyone can start a new cryptocurrency. They will make up some fake statistics, give false promises, an advertise themselves like they are already on top. People get tricked, they invest money, and never see it again.

In order to avoid falling for such scams, you need information, and you need to stay alert. Always make sure that you know and understand the product, no matter what it is. You will need knowledge of economics and technology, and especially you need info about the founding team.

Next, if you are planning to invest in a product, try it out yourself. Try to uncover its flaws, determine its usefulness, and above all, make sure that it actually works. Keep your critical thinking, and don’t allow promises of big money to cloud your judgment. That is the fastest way to lose it all to a scammer.

Always keep in mind that your investment might not pay off. Create a plan of action for such scenarios, and try to think how it will affect the rest of your funds, plans, and alike. Expecting that something will pay off for sure is a very bad thing since you won’t manage your funds rationally anymore. Best to stay on your toes, and always stay prepared for anything.

Wrap up

Cryptocurrencies are a good way to make and manage money. However, keep in mind that they are still a new thing and that they are still trying to settle and find their place in the world. One day, they might be worthless, only to become priceless the next. However, the process can also go backward as well, and you best not forget that.

The bottom line is that there is an opportunity, as well as a risk. If you risk everything, you might win, or you might lose. If you want to, you can play it safe as well. That will include a lot of suspicions, and even being a bit paranoid. However, that is the method that will most likely pay off.

Always remember that you should secure your Bitcoin, but also your computer, and the rest of devices as well. Remain patient, and don’t lose your cool. Invest carefully, not all at once, and not all in the same place. And, of course, stay critical, and don’t allow scammers to get to you.

Ali is a freelance journalist with 5 years of experience in web journalism and marketing. He contributes to various online publications. With a master degree, now he combines his passions for writing about internet security and technology. When he is not working, he loves traveling and playing games.

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