As we all know, cryptocurrencies are highly volatile. But in the growing era of cryptocurrency, they are highly profitable investment options. Everything in the crypto world is somewhere related to bitcoin. Bitcoin was the first ever launched cryptocurrency in 2009 by an unknown group. But it is essential to ensure crypto safety in an exchange.
If you have just invested in digital currency, adding your coins to the wallet can offer additional safety. Recent reports about hacking may worry you if you have recently invested in crypto. The recent few year’s data breaches and hacking cases led us to think about the credibility of these platforms. Over the few years, hackers have stolen millions of dollars from these accounts. Crypto exchange wallets are not entirely protected.
The report suggests From 2011, almost 1.25 billion worth of cryptocurrencies have been stolen from the crypto exchange platforms.
There is always a lack of transparency on the exchanges, which can be problematic for investors.
Wallets can be great for securing your cash. The coins you buy automatically will be stored on the exchange platform. Understanding the importance of wallets is crucial if you want to keep your digital currencies safe.
Understanding the potential risk associated with crypto exchanges
Exchange platforms are not fully protected. Whenever we deal with digital assets, there is always some risk associated. Investors, however, consider crypto safety with wallets can be a good option to keep their funds. The safety of your funds often depends on the platform you make transactions. There are centralized and decentralized types of crypto exchange platforms. Both have loopholes that hackers take advantage of.
A centralized crypto exchange platform works like a middleman that facilitates crypt-2-crypto or crypto-to-fiat (regular money) transactions. While doing this, it also stores crucial information like assets’ private keys. A private key is a secure password to spend your cryptocurrency. Apart from this platform also take KYC details to complete the transaction since this centralized platform has a lot of your private data to draw the attention of spammers and hackers. Currently, most digital transactions are via centralized exchange platforms.
On the other hand, decentralized exchanges are unsuitable for all users as they involve many technicalities. A consumer opting for decentralized exchange should be well-versed in technology. All cryptocurrency platforms are a combination of private and public keys.
Exchange platforms have taken many security measures to protect your security. However, they could be better. Two-factor authentication (2FA) is one such measure that protects your crypto funds even the hackers have your password.
This is very important to protect your account. However, it doesn’t guarantee to protect your account. Cold storage is another method to protect your security, storing most of your funds online. Suppose the platform offers cold storage.
That’s an excellent sign. Despite this, hackers can access the stored information and use it to gain access. That’s why investing the entire sum in these platforms is not considered a wise decision.
In conclusion
Regardless of all the security measures the crypto exchange platform offers. It’s not right to trust them unconditionally. No platform is entirely protected and hacker-proof and good and bad conditions are involved . Risk is part of your investment. If you want to earn big profits through crypto exchange platforms, a hardware wallet for crypto safety is a provably secure way of storing cryptocurrencies.
