How Safe Is 
Cryptocurrency?


Many investors wonder: How safe is cryptocurrency? 

There have been headline-grabbing stories about hackers stealing millions of bitcoin and altcoins from investor accounts. 

According to a Silicon Valley company called CipherTrace, cryptocurrency thefts have totaled $1.2 billion in the first three months of 2019, and $1.7 billion in 2018. 

But how safe are cryptocurrencies? 

The following are some tips to make sure your digital assets are secure.

How safe is cryptocurrency?

Offline Crypto Wallets Are More Secure

An offline crypto wallet, also known as a cold storage, is not online. 

It stores the private keys of the cryptocurrency addresses on a dedicated hardware device. The only way anyone can access this private key is to sign the transaction. This method of crypto storage greatly reduces the risk of attacks on the wallet. Unlike online wallets, offline wallets do not have an interface, but rely on encryption and backups to ensure the security of your private keys.

While hot wallets are convenient, they are not as secure as cold wallets. 

While hackers can steal your cryptocurrency, they can only access it from the physical wallet. Therefore, cold wallets are the safest way to store and access cryptocurrency. Although they are more expensive, they can be worth the money if you plan on using your coins for a long time. These wallets are also more difficult to lose if your computer crashes or is stolen.

While most mobile devices and desktops are safer than offline wallets, there is still some risk involved. You should be careful not to boast about your crypto holdings online. Moreover, don't share your private keys on social media, as anyone can steal them. While storing cryptocurrency offline, always treat the device with care. If you have a smartphone, it's best to use a hardware wallet. However, this doesn't mean you have to sacrifice security. You can still access your private keys and recover your funds if you lose your wallet.

Desktop wallets are software packages created by a company, which you can download onto your computer. They are considered safer than online wallets because they don't connect to the internet. And because they don't connect to an exchange, they're not as vulnerable to malware attacks. 

Desktop wallets also prevent hackers from accessing your private keys because they're stored on your computer. They also prevent hacks by preventing anyone from decrypting them.

Another good way to make crypto wallets more secure is to use hardware wallets. 

This way, you can safely store your private keys offsite and continue to conduct online transactions. They combine the convenience of online wallets with the added security of offline storage. Hardware wallets include Ledger Nano and Xapo. You should also consider hardware wallets if you have an investment portfolio, as they offer the same benefits of online wallets.

Hardware Wallets Are Less Secure

Although hardware wallets are not as secure as software wallets, there are some advantages to using one. 


Ledger and Trezor support multiple platforms and operating systems, and both have fail-safe physical redundancy. In addition, Trezor has Bluetooth connectivity, which makes it more suitable for cryptocurrency beginners. But there are some disadvantages to using a hardware wallet. Here are some of them. Let's explore the pros and cons of each.

In theory, hardware wallets are less secure than software wallets, because they don't let the private keys leave the device. That means a malicious malware cannot steal the private keys from hardware wallets, but it can spy on you and trick you into accepting fake payments. However, this security risk is negligible if you store the passwords in two or more locations. For this reason, it's still better than nothing.

A hardware wallet is like an impregnable Swiss bank account, but it is not connected to the internet. A hardware wallet contains a secure chip, which makes it virtually impossible to hack. The device also includes a pin that you can use to unlock your wallet and restore access to your cryptocurrency. Although a hardware wallet is less secure than software wallets, it can still be a great choice for those who want a secure way to store their crypto.

A hardware wallet's security is compromised when it's connected to an exchange or a "hot" wallet. If a hacker can access the "hot wallet" and exchange, he can easily steal your funds. You should also consider the compatibility of the hardware wallet with other services to make sure it's as secure as possible. When purchasing a hardware wallet, consider the security risks involved and decide if it's worth the cost.

Hardware wallets are less secure than software wallets, but they're easy to use and more convenient than software ones. If you're holding cryptocurrency for a long time, you'll want a hardware wallet. But if you're not selling, you should leave it on an exchange. So how can you decide which one is the best choice? The answer is: it depends on how much you want to use your cryptocurrency.

Transactions Should NOT Be Completed On Public Wi-Fi

When using a public Wi-Fi network to complete your transactions, ensure that you have a strong password. 

Some public Wi-Fi networks may be compromised, which means your transactions could be vulnerable to theft. 

It is important to protect yourself from these risks by using a strong password when completing transactions with cryptocurrency. 

Read on to learn more about how to stay safe while using public Wi-Fi for cryptocurrency transactions.


​Transactions Should NOT Be Completed On Public Wi-Fi

Security Measures Taken by Exchanges

​Ways to Invest In a Cryptocurrency

In addition to adopting best practices for data protection, cryptocurrency exchanges must take basic security measures to protect their users. According to a recent Sqreen report, 80% of cryptocurrency exchanges fail to implement basic security measures, while 60% of them are not compliant with Strict Transport Security (STP) standards. Eighty percent of exchanges also expose sensitive data. Most exchanges are also lacking in support for Content Security Policy, and their technical maintenance is left to developers. To make sure your cryptocurrency exchange is safe, read the following security measures:

Most cryptocurrency exchanges employ a two-step security mechanism called a Bitcoin lock. The first key unlocks the funds, while the second key reverses the transaction. This mechanism is crucial for preventing attacks from moving crypto assets from one account to another. Many exchanges have implemented this security feature, so users will be alerted to unusual activity. In addition, most exchanges send notifications for deposits and withdrawals. This way, users can be more vigilant about suspicious activity and prevent fraudulent transactions.

Some cryptocurrency exchanges have security vulnerabilities, including those related to internal systems. A single employee accidentally releasing a password on public internet computers can compromise a user's account. Additionally, unsecured networks and devices can allow cybercriminals to gain access to private keys. The key to successful cybersecurity is having an experienced development team implement security measures that are as effective as possible. And of course, a secure environment means the crypto exchange has a lower chance of facing hacking attacks.

Never Use Weak Passwords

Many employees of cryptocurrency exchanges use weak passwords and store credentials in a way that makes it easy for hackers to get to the sensitive data. 

Furthermore, hackers often attempt to access workers' personal computers and steal sensitive information. For this reason, employees must make sure their credentials are secure. When using a secure exchange, a Secure Sockets Layer certificate is a great sign of trust. With these certificates, consumers can feel more confident that their financial data is safe with the exchange.

Many centralized crypto exchanges keep their customer funds in "cold wallets," which are completely disconnected from the Internet and inaccessible to hackers. However, even these precautions do not ensure complete security, because users may still be subject to hackers. Some exchanges conduct smart contract audits to protect their users' funds. In addition to using cold storage, most exchanges also use smart contracts to control trade volumes. A good example is Coinbase, which conducts audits of their smart contracts.

How Secure Is Cryptocurrency?