Security 101: 5 General Security Considerations Every Crypto Investor Should Know

2021/11/12 09:49:59

The cryptocurrency market is worth well over $2.5 trillion and has about 13,000 unique tokens, each with its own volumes and market caps. The trillion-dollar valuation is representative of how far the cryptocurrency market has come over the decade.

Today, crypto assets are undoubtedly one of the hottest, most trending, and successful investment vehicles today. According to TripleA- a crypto payments service platform, as of 2021, crypto ownership has been estimated to reach an average of 3.9%, with over 300 million crypto users worldwide.

Source: https://triple-a.io/crypto-ownership/

Cryptocurrencies, blockchain technology, DeFi, and GameFi are undoubtedly the most trending topics in mainstream media today. There are barely any headlines without the mention of anything related to cryptocurrencies and blockchain technology, and there’s a lot of hype surrounding the crypto ecosystem, leading to one of the biggest challenges for new and experienced investors, which is trying not to get caught up in the hype.

Cryptocurrencies are emerging in the portfolios of many retail and institutional investors, despite consistent caution from analysts about the volatility and uncertainty inherent in the space. Seeing people make millions from a thousand dollar investment is attracting a lot of investors worldwide.

While there is an abundance of opportunities to earn astronomical profits, it’s important for investors not to get caught up in the hype. The abundance of opportunities is countered by an abundance of scams and other security issues within the crypto ecosystem. While you might potentially make millions of dollars, there’s a very high chance you could lose all of your capital if you take your security lightly.

This is why we’re here to share some security considerations that every crypto investor should know.

Keeping Your Account Secure

We can’t stress this enough, but keeping your account secure should be your number one priority. At KuCoin, we care about your security and we provide a set of necessary security protocols that help keep your account safe.

As an extra protection layer, you should enable two-factor authentication (2FA) on your KuCoin account to help protect your assets and prevent unauthorized access even if your passwords are compromised. 2FA essentially acts as an added layer of security.

Another important aspect of account security is choosing strong passwords. Strong passwords don’t have identifiable personal information, they are long, unique, and have special characters. You should change your passwords every few weeks to protect your account and assets.

Picking a Secure Exchange

There are over 424 exchanges in the market, and picking a secure exchange is very important. KuCoin is one of the largest crypto exchanges with 10/10 Trust Score on CoinGecko, which means you can invest and trade with peace of mind and without worrying about the core exchange security.

Source: https://www.coingecko.com/en/exchanges/kucoin#trust_score

KuCoin also has a higher level of regulation in retrospect to other exchanges, and follows the Anti Money Laundering (AML) and Know Your Customer (KYC) protocols, making it more secure and regulatory friendly. However, note that centralized exchanges are also known as custodian exchanges, so you’ll have to give up control over your assets to the exchanges.

Keeping Your Crypto Secure

After making sure your account is secure and investing in some assets, investors must know how to keep their assets secure. You can either opt for an exchange account and delegate the security, or you can withdraw your funds in cold/hot wallets to have more control.

Investors can protect their private keys in Hierarchical Deterministic crypto wallets, where they can have access to an extensive array of private keys that save them from potential crypto jackings or crypto clipping attacks.

Investing in Credible and Audited Projects

There are about 13,332 unique cryptocurrencies in the market, over 424 exchanges, and millions of DeFi projects and Dapps. As an investor, it can become overwhelming to find the next big hit. However, one general security consideration an investor must know is that they should invest in audited projects.

If you’re looking to invest in tokens, interact with smart contracts, staking pools, or provide liquidity, you must look for projects with audits. Audits analyze a project’s code. Auditors look for backdoors, exploitable scripts, and security issues within the project’s code and then report it to project owners, who make the necessary changes to the code. Changes in the code are then added to the final report to show users the complete transparent process. The recent Squid Game Coin scam also turned out that the developers had changed the codes in its smart contract backdoors.

While an audit doesn’t guarantee you complete safety, it does increase the chances of your funds staying secure.

Having an Eye out Against Scams

Cryptocurrencies are digital gold. The emergence of the ecosystem attracts a lot of malicious intent from scammers and hackers around the world. An increasing number of people are looking to exploit investors’ lack of knowledge and steal their crypto. And thanks to the nature of cryptocurrencies, once their assets are stolen, there is no way of getting them back, which is why you as an investor should have an eye out for scams.

Some of the most common scams are phishing attacks, crypto jacking, crypto clipping, crypto dusting, fake exchanges, blackmail threats, pyramid schemes, and impersonation. As an investor, you should know how to spot potential scams and avoid them beforehand.

Closing Thoughts

There’s an increasing number of investors joining the cryptocurrency ecosystem to make it big. Unfortunately, the abundance of opportunities in the cryptocurrency ecosystem is balanced by an equal number, if not more, opportunities for potential security exploitations.

This is why it’s of utmost importance that you must follow these general security considerations, keep yourself safe, and perform your due diligence before investing or joining the crypto space.