How to ensure the security of cryptocurrency?

Blockchain technology is known as a secure platform. Users choose blockchain to conduct transactions because this system includes a decent hacker protection mechanism. But, due to the fact that since the beginning of 2022, the financial losses of NFT tokens are 667% higher than in 2021. Therefore, it is recommended to observe additional security measures from cybercriminals.

What threatens cryptocurrency today?

For the first time, hackers paid attention to cryptocurrency in 2011. In 2018, tokens worth $1.7 billion were stolen, in 2019 – $4.5 billion, in 2020 – $1.9 billion.

As of April 2022, hackers have stolen a cryptocurrency equivalent to $1.3 billion. To do this, they committed 78 cybercrimes. At the same time, over the past ten years, the amount of crypto that attracted the unhealthy attention of scammers was $12 billion.

You put your cryptocurrency at risk when you do not withdraw it from an exchange or crypto exchange. And given that local storage is vulnerable, there is a threat of data loss, because any fraudster can follow your transaction and steal tokens. Also, if a hacker has contacted you directly, they may use phishing or other attacks to bypass the authentication mechanism and withdraw money from someone else’s wallet. Finally, the cryptocurrency can be lost randomly, as a result of force majeure. But the latter threat is usually considered when investing in a particular cryptocurrency. Therefore, consider cases of intentional theft.

Despite the apparent anonymity, there are hundreds of ways to identify a person by analyzing a transaction in bitcoin. At the same time, if you use encryption, you can protect electronic money. For example, here is how ExpressVPN describes the situation in the manual. You connect to a secure VPN connection, and the traffic moves from the device to the network, hidden in a special tunnel. If you perform this simple operation on a gadget where you can conduct transactions in a crypt, no one will declassify your identity.

But that’s not all! Consider the most common problems that crypto owners face. And let’s see if we can do something.

Tracking Secrets

Each transaction includes at least one element that shows where the bitcoins come from. As well as a similar indicator of where they go. This creates a bridge that can be used to track how the transaction was carried out. In addition, each transaction in bitcoin must somehow correlate with the previous one. Therefore, the greater the number of transactions, the higher the chance of remaining anonymous on the network. And this is the first life hack.

It is also often possible to find out the name of the owner of the crypt from transactions in bitcoin. For example, you buy goods and services online, specify your own delivery address. The only way to avoid such deanonymization is to not use bitcoin when you need to physically deliver an item.

By conducting transactions in bitcoin, you naturally create a message on your smartphone or computer, send a message to the network. However, if someone is online all the time, that person can easily correlate some of your transactions with an IP address. And then deanonymize a whole set of tokens. On the other hand, this is easy to defend against. It is enough to conduct transactions through Tor. In addition, most bitcoin clients and cryptocurrency wallets support Socks5 proxies.

Finally, when a bitcoin address enters the blockchain network, it is highlighted in the database. But until this happens, the address is known only to two parties – the sender and the recipient. So, if you start looking for an address that has not yet appeared on the blockchain, it turns out that only you are the owner of the address, or the person requesting payment. So it is also possible to follow the other person in this way. To avoid surveillance, make payment requests through encrypted channels. For example, when searching for a bitcoin address, make sure that the site you are visiting is protected by an https connection. Combine VPN and Tor. Also provide encryption with tools such as PGP key (Pretty Good Privacy app) and OTR (Off-the-Record Messaging cryptographic protocol).