On a blockchain, smart contracts are codes that carry out a set of instructions.
The rise of cryptocurrency has opened up the possibility for hackers to exploit loopholes in the blockchain and defraud millions of users around the world. If the online crypto industry continues to attract new users at an unprecedented rate, the number of hacking incidents is bound to increase in the coming days and weeks, industry experts have warned. Already some estimate that more than $650 million has been targeted in major cryptocurrency thefts, hacks and frauds between January and July of this year. There are still many more to be reported for reasons including a lack of proper understanding of the technology.
Like any industry, cryptocurrencies are not safe from thefts and scams. However, experts advise investors to fully understand the risks involved when trading these digital assets. The best that a trader can do to protect their investment is to make themselves aware of the potential pitfalls and common mistakes of others.
Here are a few tips:
1) Research thoroughly
Investors should always take the time to thoroughly research crypto or any other digital asset they wish to invest in. They can start from the official website of the crypto project. Learn about its founders, developers, and current supporters. Find out where the project is available to purchase. These should give an early indication to determine whether the project is suspect.
2) fraudulent website
Don’t fall for fraudulent websites. There are an astonishing number of fraudulent websites being set up regularly that resemble the official website. Hobbyist investors often fail to distinguish the fake from the real. If in doubt, ask people who have already been in the industry for a while. Beware of phishing emails.
3) Fake Mobile App
Another limitation for security is downloading crypto trading or exchange apps from verified sources. Scammers often trick investors through fake apps. Although these apps are quickly recognized and removed, it doesn’t mean that fake apps are going to stop anytime soon. Look for obvious spelling mistakes in the copy or in the name of the app. Ask yourself if the branding is weak or the logo is wrong.
4) Focus on smart contracts
On a blockchain, smart contracts are codes that carry out a set of instructions. Although they are technical, they usually help to understand the overall potential of a crypto project. If there is a problem with the smart contract, there may be vulnerabilities in the project.
5) Keep your wallet safe
Lastly, protect your wallet wisely. All wallets have two keys – private and public. Make sure that the private key is not disclosed to the public under any circumstances. Despite this, there are risks with wallets and cold wallets are generally the safest option for storing private keys.
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