Is Using A Cryptocurrency Exchange Safe and Secure?

Cryptocurrencies have caused an online buzz on the internet especially during its boom last at the end of 2017. Perhaps it is this online popularity that has enabled crypto to gain traction over the years. The current market capitalization of cryptocurrency – which includes the likes of Bitcoin, Ethereum and XRP – is $132.14 billion. Satis Group has predicted that the market cap of cryptocurrency will break $1 trillion mark in 2021.

This projected growth in cryptocurrencies begs the question of security and safety in the cryptocurrency market. Is using a cryptocurrency exchange safe and secure? Recent hacks in the crypto industry have seen a spiralling decline of cryptocurrencies in the market. Like in any other new technology there are risks for cryptocurrencies.

You should keep up to date with the relevant operators in your own jurisdiction. For example, it is imperative you read a decent Canadian crypto exchange review list if you are a Canadian crypto trader. This list compiles the ten best cryptocurrency exchanges in Canada. You should choose an exchange that minimises your security risk and there are simple steps you can follow to ensure this. 

Here is how you can keep your exchange cryptocurrency safely and securely.

Secure your Cryptocurrency Wallet

If you want to exchange your cryptocurrencies in peace, it is a prerequisite to store them on the best available wallets in the market. Secure wallet offers you extra security features such as Pin code, 2FA authentication and Passphrase features. The more security features, the better. Additionally, some factors which can help you choose a suitable wallet include:

  • Ease of use
  • Compatibility – It should be compatible with your device and different operating systems
  • Private Keys – You should be able to control your private keys
  • Development community
  • Backup and security

Some of the recommendable wallets include Ledger Nano S, My EtherWallet, Exodus, Coinmi and Trezor.

It is imperative that you backup your cryptocurrencies. You see, today we back up photos and messages. Why not back up your cryptocurrencies? Ideally, your cryptocurrencies are safe as long as the services are not hacked. It is therefore prudent to have a backup.

Many cryptocurrencies traders invest in hardware wallets. A web-based wallet is prone to attacks. You can keep a hardware wallet safe and plug it in when you are about to perform a transaction. It is important to buy hardware wallets directly from the manufacturer. You should keep an offline backup of your private keys. Also, you can store your seed or mnemonic phrase in more than two places. Keep the mnemonic passphrase or mnemonic phrase at two locations only you know of.

Online Best Practices

In the cryptocurrency industry and digital world, in general, hackers maliciously try to steal anything they can. So while using online wallets such as desktop, web or mobile wallets, you may be vulnerable to Trojan, malware and virus attacks. It is essential to use digital world best practices which include:

  • Having a secure and strong firewall in place
  • Using antivirus in your devices
  • Avoid using public wifi when transacting cryptocurrencies
  • Never use an insecure website or install unverified apps and websites in your device
  • Always use 2FA authentication
  • Use Punycode alert extension on chrome to dodge phishing attacks

Cryptocurrency exchange happens without banks interference hence giving power to ordinary people. This freedom comes with great responsibility. You should be sagacious enough to avoid landing your account into the hands of hackers by keeping your computer and data safe. If you keep the tips discussed above at the back of your mind, you can transact in the crypto world in peace. Ultimately, using a cryptocurrency exchange is safe and secure, but only if you consider the above best practices.

DISCLAIMER: Be aware that the activity of cryptoassets mentioned in this article is unregulated. This article must not be construed as investment advice. Always do your own research.

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