Key Takeaways
- Safeguarding crypto assets is the sole responsibility of every trader or investor who must choose the best software or hardware.
- Users must always be on guard against common scams, such as phishing, to protect against potential losses.
- Always back up private keys and seed phrases offline in a secure location so you are prepared for any unforeseen circumstances.
With all the potential profits you find in crypto investment, some inherent risks require users to approach it with an informed and cautious mindset. This article will educate you on the most common crypto security mistakes and how to avoid them.
Profitable But Risky
Getting into crypto investment or trading can be a tremendous and exciting avenue for making profits, but it is also fraught with potential risks. Newcomers and advanced users can easily make mistakes, some of which are costly. Protecting your digital assets is your sole responsibility, and it goes hand in hand with the potential to make profits. It is, therefore, essential for traders to be aware of the most common pitfalls. By educating yourself and seeking expert advice, you can enjoy relative peace and avoid the most common crypto security mistakes. The following is a list of the most common crypto security mistakes that could easily wipe off your entire investment if not avoided.
Being Casual on Secure Storage
Since security is the user’s responsibility, the first and most common crypto security mistake most people make is leaving their coins on an exchange, where they are vulnerable to hacking and other related problems. It is advisable to invest in a hardware wallet that can keep your private keys offline. This provides guaranteed protection from internet-based threats, including hacking. Remember the adage, “Not your keys, not your crypto.”
Being Too Naive to Recognize Phishing Attempts
Phishing emails and messages may be among the oldest tricks used by scammers. However, some investors still fall prey to them, revealing sensitive Information like seed phrases and passwords. Irrespective of how convincing or genuine a message looks, always double-check the sender’s details and website addresses. Always consider any unsolicited message offering financial advice or unrealistic and guaranteed financial returns, even when they claim to be from a legitimate platform, a red flag.
Too Lazy to Create a Strong Password and Multi-Factor Authentication (MFA)
Your crypto wallets and accounts are as strong or susceptible as your passwords. Most people create passwords that are easy to guess by using things like their birth dates, etc. It is advisable to use a strong and different password for your different accounts and, where possible, include two-factor or multi-factor authentication. By having the system send a code to your phone or any other device, you will have an additional level of security when accessing your account.
Easily Sharing Confidential Information Publicly
Your private key, seed phrase, and any other sensitive information are gateways to your crypto and should never be shared with anyone. Whether it is an employee of a crypto organization or exchange or even complete strangers who appear to be kind enough to help either in person or via the internet, you must keep all your details private to prevent anyone else from accessing your cryptocurrency.
Clicking Questionable Links or Downloading Unverified Software
Failure to be careful when updating your device or wallet software can be a recipe for disaster. That’s because it’s now possible for malware to resemble genuine software and steal your private keys and other login details. It is, therefore, a user’s responsibility to countercheck any program before downloading it to ensure it comes from a reputable source. Be extra vigilant around apps that promise “easy” ways of doing anything, including getting a lot of free money. Always proceed cautiously, even when dealing with links that appear to be from reputable sources.
Disregarding Public Key Verification
If verifying the public keys of a sender or recipient whenever you are executing a transaction seems like a waste of time, you could be treading on dangerous grounds. You must take a few extra moments to ensure you’re dealing with the intended crypto address. Always double-check these crucial details to avoid transferring to the wrong addresses and losing your funds.
Being Greedy Enough to Fall Victim to FOMO (Fear of Missing Out)
Successful crypto trading or investment requires making sound and informed decisions. You’re treading on slippery grounds every time you make decisions in the spur of the moment to avoid missing out. Decisions made due to greed driven by hype or social media trends will almost invariably backfire. Always conduct extensive research to understand the true nature of a project before investing, and always try to remain composed when you are at it.
Ignoring Online Reviews and Community Sentiment
The best crypto platforms and projects have thriving communities where issues like problems, challenges, and processes are discussed. You can easily learn about a project by reading community discussions and online reviews. Be careful when encountering a project with predominantly negative feedback or unrealistic promises.
Failing to Uptake Platform Updates and Security Patches
Things in the digital world are constantly changing, and platforms will continually update their systems, especially when implementing security patches. Implementing updates will enable you to become aware of and stay protected from emerging threats. Whenever you ignore updates, you make yourself vulnerable to the newest vulnerabilities.
Never Back Up Your Information
It doesn’t matter how good your memory is; it’s essential to back up crucial details like seed phrases or private keys in case of loss or a hardware failure. Once backed up, you must store the information in an offline location that is safe from water damage or potential fires. Some people use metal recovery sheets or secure password managers to back up their essential information physically.
Conclusion
Avoiding these common crypto security mistakes requires a watchful and proactive approach. The decentralized structure of these assets comes with potential benefits and difficulties, most of which are still emerging. You can possibly increase the security of your assets by being more vigilant and making the extra effort because blockchain transactions cannot be undone once executed. Always remember that you are solely responsible for protecting your crypto assets.
