7 Ways in Which Crypto Platforms Ensure Security For Their Users
Popular cryptocurrencies like Bitcoin, Litecoin, Bitcoin cash, Ethereum, Ripple, etc., are built on pretty solid foundations. However, the crypto industry is expanding every day, which calls for greater security.
Many news articles concerning crypto frauds have made the headlines in the past few years. The surge in prices in cryptocurrencies means that virtual currency can become a prospective target for hackers.
When a person’s crypto wallet is hacked, the investor cannot approach recourse legally since digital currencies are unregulated by the government. This calls for the urgent need for cryptocurrency security.
In addition, if the security in the cryptocurrency industry is not improved, the mainstream adoption of digital currencies won’t happen swiftly. Therefore, crypto platforms need to ensure blockchain security, and investors should feel safe and trust a platform to make crypto exchanges.
In today’s article, we have discussed how crypto platforms can ensure safety.
How secure is cryptocurrency?
With the ever-increasing hype surrounding cryptocurrency, investors need to understand how secure cryptocurrency is. The security of cryptocurrency is maintained using blockchain technology.
In blockchain technology, transactions are recorded in “blocks” and time-stamped. This tedious process results in a secure digital ledger of cryptocurrency transactions, and it ensures that hackers cannot easily hack into an investors’ wallet.
Cryptocurrency transactions also entail a two-factor authentication process. Even though these security measures are in place, it doesn’t guarantee that digital currencies are immune to hackers.
The possibility of a person’s crypto wallet being hacked is quite real since hackers are skilled in accessing personal information and login credentials. SIM swap assaults and phishing attacks are the most common ways hackers can take advantage of crypto wallets.
Investors should be careful about the crypto platforms they use to conduct transactions. Different crypto platforms offer different features, and therefore, it is important to explore various wallets before settling for one.
7 Ways In Which Crypto Platforms Can Ensure Safety
As we discussed, crypto platforms need to ensure safety so that investors feel confident to make exchanges. This can be achieved with the help of different blockchain security principles.
Using strong passwords
As simple as it may sound, using strong passwords is an excellent technique for preventing crypto frauds. Crypto platforms must make it mandatory for users to have unique and strong passwords, and Two-factor authentication and password rotation should be implemented whenever possible. Using an integrated password manager can also make it convenient to automate the security process.
Protection from mobile phishing
These days most crypto platforms have come up with a mobile app version. While mobile crypto platforms are convenient to use, they can be an easy target of phishing campaigns. These mobile phishing campaigns can steal the users’ login credentials and take advantage of their accounts. These attacks can come from anywhere, including social media, third-party messaging apps, SMS, email, and so on.
Crypto platforms can protect their app by installing antivirus software to prevent mobile phishing.
Banks provide FDIC insurance which protects the customer’s assets from theft or bank failure. Although crypto platforms don’t have FDIC insurance, several exchanges provide additional insurance for the investors’ assets. This way, if cryptocurrency gets stolen, the investor is duly compensated.
Implementing the bug bounty strategy
Many crypto platforms implement the bug bounty strategy. In this security program, independent security experts or ethical hackers are encouraged to test the platform and look for system vulnerabilities. Once the security weaknesses are identified and reported, the platform improves its security.
Using cloud-based computing and security
One of the most effective ways to ensure crypto security is cloud-based computing. Crypto platforms should secure their sensitive customer information by backing it up in the cloud, making it nearly impossible for hackers to target crypto wallets.
Crypto exchanges must keep some of their assets online and in the “hot storage.” This makes it accessible. However, some crypto platforms offer additional cold storage where assets are kept offline, air-gapped, and difficult to physically access. This prevents crypto frauds and hacks.
Making the crypto platform non-custodial
Non-custodial wallets allow investors to retain full control of their assets, even in escrow. In other words, it is a type of blockchain wallet that lets investors be their own banks. Only the user has access to the private key. Non-custodial crypto wallets have an edge over custodial wallets because of the growing number of data breaches and fraud cases.
5 Crypto Platforms That Ensure Security
While most crypto platforms have standard security programs like two-factor authentication, investors should choose those that go an extra mile to keep their assets safe.
Founded in 2012, Coinbase is one of the most reliable crypto platforms. Coinbase is not only known for its bug bounty program, but it also keeps almost 98 percent of its currency in cold storage. The platform also claims to insure all the currency held in the hot storage.
Established in 2014, Gemini guarantees more than $200 million in crypto insurance coverage. The majority of the digital currency is stored in cold storage, and customers also have the option to buy additional insurance. They also have a solid bug bounty security program in place.
Zapit is a leading non-custodial cryptocurrency wallet. The platform never retains control over the users’ funds, even during or after the exchange. Users are given 100 percent autonomy, making Zapit one of the most trusted crypto wallet.
Robinhood has one of the best-known bug bounty programs, and Lloyds insure its assets against threats, frauds, and losses. Coins are also held in cold storage, and users maintain full control over their digital assets.
Last but not least, Crypto.com has secured a total of $360 million in cold storage. This covers insurance against any physical damage, destruction, losses, or third-party theft. They also use a bug bounty security program hiring expert ethical hackers.
It is always better to tread with care and invest and store a smaller amount of money on crypto platforms and wallets at the beginning. This will ensure safety and minimize losses in case of any untoward incident.