How to be safe in Cryptocurrency

1. Understand how cryptocurrencies work

Cryptocurrencies are digital currencies that use cryptography to secure transactions, control access, and verify transfers. Cryptography is the branch of mathematics that deals with encryption techniques. Cryptocurrency is based on blockchain technology, which was invented in 2008. A blockchain is a distributed ledger that records transactions across many computers at once. In order to complete a transaction, two parties must agree to it first before any information is added to the blockchain. Once the agreement is reached, the transaction is recorded in the blockchain. To make sure that no one tries to change what’s written in the blockchain after the fact, each computer connected to the network keeps a copy of the entire chain. If someone were to try to alter something they would have to hack into every single computer connected to the network, which is extremely difficult.

2. Know where to buy

There are several ways to purchase cryptocurrency. You can go to local exchanges, online exchanges, peer-to-peer exchanges, and even physical locations. Local exchanges are stores that allow people to trade directly with each other. Online exchanges are websites that connect buyers and sellers. Peer-to-peer exchanges are similar to local exchanges, except instead of trading with other individuals, you trade with companies. Physical exchanges are places where you can actually exchange fiat currency (money) for cryptocurrency.

3. Be aware of scams

Scams are a huge problem in the cryptocurrency world. There are many different types of scams, including pump and dump schemes, fake ICOs, phishing, and more. Pump and dumps are when a company creates a lot of hype around its project and then sells off its tokens at a high price. When the price drops, investors lose money. Fake ICOs are when a company claims to be doing an initial coin offering, but isn't registered with the SEC. Phishing is when scammers send emails to people pretending to be from a bank or other trusted organization asking them to log into their accounts or provide sensitive information.

4. Keep your private keys safe

Your private keys are basically passwords that give you access to your wallet. Your private keys should never be shared or stored anywhere online. If you lose your private keys, you won’t be able to access your funds. Always keep your private keys offline in a password-protected file on your hard drive.

5. Use 2FA

Two-factor authentication (2FA) is a way to protect yourself from hackers. It requires users to enter the second piece of verification code whenever they log in to a website or service. Hackers need both your username and password and your phone number to gain unauthorized access to your account. Using 2FA helps prevent fraudsters from accessing your account if your device gets stolen or lost.

6. Don't store your coins on exchanges

If you want to sell your coins, you'll need somewhere to transfer them to. Exchanges are platforms that let you buy and sell cryptocurrencies. However, these platforms hold your coins. Make sure to only deposit cash directly into your wallet and not to your exchange wallet. This way, you own the private keys to your coins and are responsible for them.

7. Avoid shady wallets

Wallets are software programs that help you manage your crypto assets. Wallets are open systems that anyone can download and install. Unfortunately, some wallets are designed to steal your coins. Before installing a new wallet, do your research and find out about its reputation. Here's a list of things to look for when choosing a wallet: