Cryptocurrency refers to virtual payment methods in the internet – including bitcoins, litecoins, ether or even dogecoins. They are completely free of transaction fees, bank charges or government regulations and are thus practically unerring to follow. The currency is true, but does not circulate as banknotes in the purse, but only as a digital key.
What you may already suspect: The fact that cryptocurrencies are only virtual makes them as vulnerable to theft. Therefore, steps to protect the computer and the Internet connection are strongly recommended. In this post, we’ll show you how to protect your virtual currency.
After acquiring a cryptocurrency on a relevant website, there are three ways of storing
- in an online wallet,
- in a software wallet on your PC or mobile device,
- or – ironically – as paper print in a real wallet.
Note that you should never long term store your coins on brokerage platforms because they could get stolen in a hack or by a shady coworker of the platform, for instance.
Likewise, work is currently being done on various hardware wallets for the analogue world. They are similar to the tokens of PayPal or bank transactions, but at the moment are largely only prototypes or pre-orderable.
Like all digital, these storage methods are vulnerable to hackers and malware, such as: Eg keyloggers. Before the introduction of cryptocurrencies and other virtual payment methods, only large companies and banks had to worry about sophisticated and targeted attacks on their computer systems. Today, users save real money on their PCs, use online banking, Paypal, or your credit card for purchases on the net. In principle, everyone – including private individuals – has become interesting for criminals. And the damage is high: On Bitcoin exchanges alone, there were at least a dozen major attacks with losses of several million euros.
Cryptocurrency adds that it is not subordinate to a central bank and thus uninsured. That means the permanent loss of money when the private PC is hacked or the laptop is stolen.
Additional Security Measures To Protect Your Coins
You should therefore take the following precautions:
- Protect your PC and your mobile devices: Install antivirus protection on any Internet-enabled computer and mobile phone. This will help you avoid keyloggers, spyware, backdoors, and other security holes that could give hackers access to your money. In addition, the use of a safe-search browser is recommended – this does not accidentally lead to malicious websites.
- Continue to secure your Internet connection: The firewall should be activated on your network router or use the VPN function (virtual private network) in the Avira software. Do not use cryptocurrencies on public Wi-Fi hotspots. If you have an iPhone, a personal VPN app like Private Wifi is worth considering.
- Make regular (preferably encrypted) backup copies of your data. Be sure to choose a backup service that encrypts your data both during transmission and when saving. Web services such as Dropbox & Co. are given an additional level of security by enabling two-factor authentication.
- Make sure your passwords are protected (and paper wallet) – never show your passwords to anyone else. Cryptocurrency paper wallets contain your private key, usually in the form of a QR code. This reads any standard reader – in case of loss, criminals can then pay with your Bitcoins as cash.
If you are considering the use of Bitcoins & Co., be sure to check up extensively, consult with experts and follow our safety instructions. These hints are also recommended for conventional virtual banking transactions – independent of a cryptocurrency. We have put together a few more helpful tips for you here.