The Safest Way to Buy Cryptocurrency
If you’re new to crypto trading, you probably wonder what you should start with. Perhaps you pick the most promising token first? Or is it worth kicking off with the choice of a relevant exchange platform? Of course, it all matters a lot when buying cryptocurrency. However, your safety should always be your number one priority. The thing is that the world of crypto is full of various pitfalls, from phishing scams to fake exchanges and questionable ICOs.
But how to protect yourself and mitigate all potential risks when buying Bitcoin or Ethereum? Keep reading this article to find out.
Main reasons why it may be unsafe to buy and sell cryptocurrency
Although cryptocurrencies have been in the spotlight for a while now, blockchain-based technologies are still considered young and unsteady. As a result, there are numerous vulnerabilities in crypto exchanges that can be used by cybercriminals striving to compromise traders’ security and steal their funds. Let’s look at the most significant pitfalls of buying crypto.
Did you know that in 2021 alone, hackers stole over $14 billion from crypto exchanges and online wallets? Unfortunately, even legitimate and popular platforms used by millions of traders often fall victim to cyberattacks. For example, the PoliNetwork decentralized exchange recently experienced one of the largest cyber attacks resulting in over $600 million loss.
Furthermore, hackers keep finding new ways to bypass security systems and find vulnerabilities in blockchain-based software. So it is worth opting for a crypto exchange complying with the latest customer protection standards and requirements.
Scammers turn to various social engineering approaches to trick cryptocurrency traders into revealing their private information. Some of the most widespread malicious techniques are cryptophishing and cryptomining. Let’s look at them in more detail.
- Cryptophishing is a scam aiming to steal your private information, such as crypto keys, by encouraging you to visit an illegitimate website. Once you click on the provided link, hackers can compromise your private data. In particular, since 2021, well-known crypto services like Blockchain.com and Luno have experienced over 900 phishing attacks.
- Cryptomining, also known as cryptojacking, is a malware attack aimed at stealing users’ computing resources and using them for cryptocurrency mining. A hacker gets unauthorized access to people’s devices and adopts them to secretly generate crypto. Such viruses are extremely difficult to detect and remove with traditional antivirus tools.
The risk of buying ICO
An ICO (Initial Coin Offering) is a method of fundraising capital for a newly created cryptocurrency project. Simply put, ICO is an initial public offering (IPO) in the world of crypto. But what makes it risky? Well, according to a recent survey, over 80% of ICOs are scams. As a result, first token sales often result in significant money losses. Moreover, it’s extremely challenging for investors to assess a project’s reliability and safely invest in cryptocurrency.
From this point of view, ICO is somewhat like buying a pig in a poke. While Ethereum has become one of the most successful projects after raising 3700 BTC (approximately $2.3 million), there are many less inspiring examples. To name a few, those were PinCoin and iFan ($660 million scammed), Plexcoin ($15 million scammed), and Bitcard ($5 million scammed).
Such a large number of risks may scare you away from buying and selling cryptocurrency. But do not get upset too soon, as we have some handy tips on how to secure your trading activities. Let’s start with picking the safest exchange platform.
The most secure crypto exchange platforms
Sadly, many crypto exchanges are not real. Such illegitimate services are created to exploit victims and compromise their security. In particular, these are evil clones of official services or untrustworthy and malicious websites. So, if you wish to buy and sell Bitcoin and avoid potential scams, pick a credible crypto exchange platform. Here are some of the most trustworthy options to consider.
Binance is now one of the fastest-growing crypto exchanges by trading volume, with over 600 cryptocurrencies available. The service is currently used by around 28.6 people annually. But why do users trust this platform? Here are its most significant security benefits.
- Offline (cold) storage for users’ funds
- Careful monitoring of withdrawals and password resets
- Encryption of users’ data
- Two-factor authentication
Coinbase is the second largest crypto exchange platform by trading volume, with over 1000 cryptocurrencies available. Since its launch in 2012, the platform has earned the trust of over 73 million users worldwide. In particular, that is due to Coinbase’s robust security features:
- Cold wallet for most crypto funds
- Insurance against hacks and data breaches
- Multi-factor authentication
Crypto.com is another safe platform to buy cryptocurrency. It was founded in 2016 and has grown significantly since then, serving more than 50 million traders worldwide and offering nearly 250 cryptocurrencies. After having experienced a major data breach in January 2022, Crypto.com has greatly empowered its security features, which include:
- Offline storage for all cryptocurrencies
- $750-million insurance of data storage
- Multi-factor authentication
- Reliable protection of withdrawal
eToro exchange allows users to withdraw funds only in fiat (traditional currencies like USD, EUR, and such). However, you can also trade around 80 cryptocurrencies on the platform. eToro is an excellent choice for beginners thanks to its convenient interface and user-friendly mobile app. Here are the key platform’s security features that make eToro one of the safest apps for cryptocurrency:
- Compliance with main security standards
- The combination of cold and warm storage for digital assets
- Reliable encryption
- Two-factor authentication
While being one of the most available crypto exchanges (over 110 cryptocurrencies can be traded everywhere except Cuba, Iran, and North Korea), Kraken is also one of the most protected solutions. It currently runs a unique Kraken Security Labs project where a team of cybersecurity experts constantly improves the service’s reliability. Here are the platform’s most important security features:
- Two-factor authentication
- Withdrawal protection
- Top-notch encryption
- Offline crypto storage
Now that you know which crypto exchanges are the most secure, let’s talk about the safest cryptocurrencies to buy.
The safest cryptocurrencies to buy in 2022
Is cryptocurrency safe to buy? Unfortunately, nobody has a clear answer to this question. There are over 12,000 crypto coins out there, but not all of them can be considered safe and worth investing in. One of the most famous examples is Morris Coin which turned out to be a fake cryptocurrency. More than 900 investors were cheated after putting ₹15,000 into a non-existent token.
That is why it’s worth choosing a digital asset for your investment wisely. Here are some examples of the most reliable and time-tested crypto coins.
Please note that this is an informative list that should not be considered financial advice.
When thinking of cryptocurrencies, Bitcoin (BTC) always comes to mind first, right? It’s the king of the crypto world, the oldest and the most famous digital asset. Bitcoin emerged back in 2009 and started a new chapter in the history of financial technologies. Although it has had its ups and downs, Bitcoin is still the undisputed leader among cryptocurrencies and one of the safest options to consider.
Ethereum is not really a coin, but rather a decentralized, open-source blockchain platform ensuring the communication of smart contracts via a peer-to-peer network. And when it comes to market capitalization, Ethereum is the closest Bitcoin rival. It’s also worth noting that the actual cryptocurrency powering the Ethereum technology is called Ether (ETH).
Litecoin (LTC) is another popular cryptocurrency having much in common with Bitcoin. However, its codebase is a bit different. Unlike Bitcoin, Litecoin is open-source and peer-to-peer crypto. It also has distinctive mining algorithms and is generated faster, which makes Litecoin more accessible and quite easy to trade.
Tether (USDT) is an alternative type of cryptocurrency called stablecoin. In simple terms, Tether combines the characteristics of crypto and fiat currencies. It moves across the blockchain, but its value is strictly linked to real-world currencies. That is why Tether is much more stable than other cryptos. When buying USDT, you can avoid high volatility, yet it also doesn’t increase in value.
Cardano (ADA) has one of the largest cryptocurrencies by market cap and has quite an interesting technology behind it. Based on the “proof of stake” model, this crypto doesn’t encourage energy-consuming mining, so it’s safe to say that ADA is the first sustainable cryptocurrency.
What is the best and safest way to buy cryptocurrency?
It’s essential to safeguard yourself before buying cryptocurrencies. Here are several steps you can take to avoid crypto scams, data breaches, and other related threats.
1. Use a credible crypto exchange platform
First of all, pick a crypto exchange app with a good reputation and a powerful security system that carefully protects users’ private information. Pay special attention to the services with a vast number of security features, such as data encryption and multilevel authentication.
From this perspective, it makes sense to prioritize platforms that comply with Know Your Customer (KYS) and Anti-Money Laundering (AML) requirements. These regulations help prevent potential fraud and boost the exchange’s security. But, on the other hand, such solutions may compromise your privacy since you have to reveal your personal information to start trading crypto.
2. Protect your device from hackers
Even if the crypto exchange platform seems reliable and secure, don’t forget about numerous potential crypto-related threats. Before buying a cryptocurrency of your choice, it’s worth empowering your device with extra security measures. Such an approach will help you protect your online privacy and prevent your PC or mobile phone from being infected with malware.
Here are some helpful tips on how to defend your device when trading crypto.
- Choose a reliable antivirus tool
- Update your OS to the latest versions
- Create strong passwords
- Check URLs for the HTTPS security protocol
- Stay away from suspicious websites, links, files, and ads
- Use a trustworthy WiFi network and avoid public hotspots
3. Pick a well-protected crypto wallet
Your crypto wallet should be an impregnable fortress since that is where you will store the purchased crypto assets. But how to make sure your crypto is stored in a safe place? Let’s clear things up.
In a nutshell, there are two types of crypto wallets: online (hot) wallets and offline (cold) wallets. You can access your wallet with a private key that belongs only to you and should never be lost, revealed, or compromised.
Hot wallets are always connected to the Internet. They allow for fast transactions since you can always access your wallet through your desktop, mobile app, or web browser. However, this solution is less secure. Online wallets often fall victim to cyberattacks and data breaches, so they are not recommended for keeping large amounts of money.
Cold wallets are not connected to the Internet. It means that your funds are stored offline on specific hardware. This solution is much more secure since cold wallets are nearly impossible to hack. However, withdrawing funds stored offline is much more time-consuming, so cold wallets aren’t suitable for small sums frequently used by active traders.
4. Use VPN
You can also protect your crypto funds and make your purchase less risky with a virtual private network (VPN). This tool encrypts your data and runs it through a remote server to spoof your IP address and prevent third-party monitoring. On top of that, reliable VPNs offer many helpful security features that make your online activities, including crypto trading, much safer. In particular, a VPN can handle the following challenges:
- Man-in-the-middle attacks
- Hijacking and cryptojacking
- Phishing and other scams
- Ads and pop-ups infected with malware, and more
Make sure to choose a VPN tool wisely, as free apps often lack the necessary features and may even keep logs about your browsing habits. A credible virtual private network should protect your traffic with powerful AES-256 encryption and offer a transparent No Logs policy.
Need to protect your crypto transactions? – Consider VeePN!
If you need a reliable and effective tool to protect your crypto purchases, consider VeePN. It’s a powerful VPN with a great number of privacy and security features that will make your cryptocurrency trading experience truly safe. In particular, NetGuard will protect you from various cyber threats, including scams, phishing attacks, infected ads, and malicious websites. Besides, VeePN keeps no logs about users and protects their privacy with best-in-breed encryption protocols. Try VeePN now and pick a pricing plan that suits your needs best.
How to buy Bitcoin safely?
You can secure yourself when buying and selling cryptocurrency like Bitcoin by adhering to the following practices:
- Pick a trustworthy crypto exchange
- Protect your device from potential cyber threats
- Choose a reliable crypto wallet for storing Bitcoin
- Use a virtual private network (VPN)
For more detailed information on how to buy Bitcoins safely, read this article.
Which is the best and safest app for cryptocurrency?
There are numerous reliable and secure crypto exchange platforms. Some examples of safe apps to buy cryptocurrency are Binance, Coinbase, Crypto.com, eToro, and Kraken. One should pay extra attention to the app’s security features, data protection, encryption, and compliance with the core safety requirements. For keeping large amounts of money, it’s worth prioritizing services with cold (offline) wallets for crypto storage.