In 2023, it is estimated that investors lost approximately $2 billion to fraud, rug pulling, and hacking. While this technology has become more secure and stable, and many users are more aware of the tricks used to steal assets, there are still ways thieves can extract your cryptocurrency if you are not careful. Exists.
The experts at Smart Betting Guide have provided a guide on the best ways to keep your cryptocurrencies safe in 2024.
1. Don’t store passwords and seed phrases on the cloud
For many people, the best and most convenient way to access cryptocurrency is through an exchange or cryptocurrency wallet. Cryptocurrency wallets store users’ public and private keys while providing an easy-to-use interface for managing crypto balances. These exchanges require you to create an account with a password, and the wallet provides additional security by using a seed phrase. A seed phrase is a series of random words that stores the data needed to access or recover cryptocurrency on a blockchain or crypto wallet. Hackers often try to steal these in order to gain access to and steal cryptocurrencies.
It’s important that you don’t store these passwords and phrases in the cloud or on any device where they can be hacked. Instead, write them down or have them engraved on a metal card (to protect against water damage or fire) and keep them in a safe place on your property.
Finally, neither Cryptographic Protocol nor its customer support staff will ever request this information from you. So if someone requests it, they are trying to steal your crypto.
2. Use a hardware wallet instead of an exchange
If you want complete protection for your cryptocurrencies, a hard wallet is your best choice. This is a device such as a USB thumb drive that secures a crypto user’s private cryptographic keys in offline or “cold” storage, which can be used to complete crypto transactions online at any time. These are much safer than storing your cryptocurrencies on an exchange. Similar to the FTX collapse, users lost billions of dollars of cryptocurrencies stored in their wallets. Hardware wallets ensure that your cryptocurrencies are safe from hackers and exchange collapses as well.
Pros: No one can access it online, it is completely safe from online attacks and also prevents loss of cryptocurrencies due to exchange collapse.
Cons: Cryptocurrency may become useless if it is physically lost or damaged (though some now come with backup features)
3. DYOR – Do your own research
A rug pull is a scam in which a cryptocurrency or NFT developer hypes a project, collects investor funds, and then suddenly shuts down or disappears, taking away investors’ assets. These scams are often well disguised and can be very difficult to spot. Many are advertised on social media and can lure investors with promises of large profits. For this reason, it is important to do your own research before investing money in cryptocurrencies or his NFTs.
Here are some things to keep in mind when considering investing in new or unknown cryptocurrencies:
Investors should consider how trustworthy the team behind the project is. Are they known in the cryptocurrency community and do they have a good or bad track record? Be sure to check the legitimacy of their social media accounts. Are they just created or is there a clear history of who they are? Anonymous developers are a red flag and any project should be approached with caution. Anonymous developers are a red flag and should be approached with caution when approaching a project.
It is important to check the quality of the white paper. This is a document that explains the purpose of the project and how it will work. For cryptocurrencies, whitepapers serve as a guide to their technology, features, and goals. If the whitepaper seems vague or doesn’t offer valuable use cases or tokenomics, it could potentially be a risky investment.
One of the easiest ways to differentiate between scam coins and legitimate cryptocurrencies is to check whether the currency is liquidity locked. There is no liquidity lock in place on the token supply, so there is nothing stopping project creators from running away with their entire liquidity.
Investors should also check the percentage of the liquidity pool that is locked. A lock is only useful in proportion to the amount of liquidity pool it secures. This number, known as the Total Value Lock (TVL), must be between 80% and 100%.
• No external audit
It is now standard practice for new cryptocurrencies to undergo a formal code audit process conducted by a trusted third party. One infamous example is Tether, a centralized stable coin. The team did not disclose that it held assets that were not backed by fiat currency. Auditing applies specifically to decentralized currencies, making default auditing mandatory for DeFi projects. However, potential investors should not simply take the development team’s word that an audit has been conducted. The audit should be verifiable by a third party and show that nothing malicious was found in the code.
4. Verify fake apps and fake crypto exchanges
These are very popular types of scams that target many investors, but new investors are more likely to be affected by these as they don’t know what to download. These fake apps can be used to steal money, cryptocurrencies, seed phrases and passwords. Here’s the best way to avoid these scams:
• Do not search for encryption apps directly from the app store. Be sure to find direct download links or redirect links to app stores from the company’s official website or whitepaper.
• See the number of app downloads and reviews. If these are low, it’s a red flag.
• Check the app developer. This must be verifiable and come from an official company. Also check other apps created by the developer for spelling mistakes.
5. Additional security measures
Finally, there are some basics you should follow to protect your daily dates, accounts, and cryptocurrencies.
• Never click on links in emails from unknown sources.
• Set up two-factor authentication (2FA). This means that even if a hacker knows all your other account details, they still need your phone to hack you.
• Do not click on pop-ups or links that appear on the internet or social media.
• Be wary of messages you receive from people who say they can make you money quickly. These are popular all over social media and use fake accounts to try to scam you out of your money.
A spokesperson for Smart Betting Guide commented: “Hacking, fraud, and withdrawals not only pose a threat to retail investors, but also cast a shadow on the broader narrative of cryptocurrencies as a revolutionary force in finance. They undermine trust and stifle innovation. and impede progress toward a more inclusive and decentralized financial future. The challenge at hand therefore goes beyond personal security. Strengthening the foundations that underpin our financial future is a shared responsibility. .”