Cryptocurrency Safety

Safety is important in all walks of life, but no more so than in finance. When it comes to our money we have to take precautions to ensure its security. In the world of Fiat (Euro, Dollar), that usually means entrusting it with a central bank; which is not necessarily the most secure method; as the bank can prevent you accessing your account or stop you at any moment accessing your funds for whatever reason. Credit Cards offer some form of security, but if someone has access to your pin or card details, it could become very costly.

Unfortunately we live in a world where everyone is trying to steal something from you, whether that be your identity or your money. You cannot even open an email without wondering if this is a legitimate one. We are bombarded everyday with junk mail and targeted online ads, that we wonder; how did they know I was interested in that? With the increasing popularity of Cryptocurrencies, it is no wonder Hackers and Scammers have taken to this new fintech with glee.

Scams

Because this area is relatively new and increasing in popularity on a daily basis, mainly due to the positive impact it can have on our daily lives, it does open the door to abuse by dishonest individuals. We need to be aware and vigilante to these daily scams and not rush into actions that could give away all your funds. With Cryptocurrency, you are the bank and solely responsible for the security of your assets.

So what methods do scammers use?

There are many and most pray on the new comer into Cryptocurrency, who are not aware of the measures we can take for Cryptocurrency Safety. We have all heard of the saying that there is no such thing as a free lunch. The same applies here. If it looks too good then it generally is.

Scam [1] which is more prevalent on Twitter, is the “I’m giving away 5 ETH or 5 BTC, all you have to do is send 0.5 and I will return 5 into your wallet”. It is amazing how people still fall for this. Probably because they see a Twitter account from a respected person in the field such as @officialmcafee or @cz_binance and think its a legit giveaway. But please study their address carefully. Their account has been impersonated and the address has a letter of space altered. 

Scam [2] The Hard Fork – This is a classic case of people praying on those hoping to get some free money after a particular coin has gone through a Hard Fork on the Blockchain to create a whole new currency. If you were a holder of the original coin at a particular block size timestamp on the network, you will usually be awarded the same amount in the new coin. The problem here is, we do not know if the new coin is a legitimate coin. They will always ask you to download their wallet from their website and enter your private key as proof of original ownership to get your new coins. The problem is that once you provide your Private Keys to a third party, they immediately have access to your funds and can steal them at anytime. The advice here is: NEVER GIVE AWAY YOUR PRIVATE KEYS. Always think Cryptocurrency Safety!

Scam [3] Upgrade – Again another method to get at your private keys. You will get an email saying you need to upgrade your wallet or verify your wallet or transaction. This is usually followed by a claim that your balance is at risk. This is complete nonsense.

Scam [4] Phishing Sites – Hackers have now taken to impersonating websites that we use as wallets such as https://www.myetherwallet.com or trading sites like https://www.binance.com, which have been known to have two dots on the “i”. So what can be done here? You can either Bookmark the links to your favourite site or even download extensions that help spot phishing sites. These people are trying to access your funds and they know that in some cases you will need to enter your private key to log in, if you do not have a hardware wallet.

Scam [5] Fake Apps – Beware when downloading an App from Google Store or the Apple Store. They may not always be genuine, so always double check before downloading or using them. All they want is your funds.

Scam [6] The other too good to be true; Pyramid schemes or Ponzi Schemes such as Bitconnect. Lending schemes are an absolute no no. They promised you huge returns. Users were able loan their cryptocurrency to the company in exchange for oversized returns depending on the length of the initial loan.

Apart from Scam Six, where there is really nothing you can do if you fall for these schemes, Scammers are after your Private Keys. With these they can access your money/assets and like a bank they own your account. With online wallets or mobile wallets you sometimes need to enter your Private Keys to gain access; this is a weak point. There is never a 100% way to be secure, but the general consensus in the field is to buy a Hardware Wallet. The Private Keys are stored inside the wallet itself, so there is no way for you give it away accidentally or voluntarily. Cryptocurrency Safety is the key.

Useful Links:

Purchase Hardware wallet
Ledger Nano S - The secure hardware wallet