Cryptonomics: How safe is cryptocurrency to use?

05 August

Cryptocurrency is said to be the biggest technological leap since the Internet was introduced. With its promise of decentralization and swifter modes of transferring assets and value, cryptocurrency is making headlines and marking its spot in the financial industry. What is it about this digital masterpiece that makes the whole world buzz with excitement? Read […]

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Cryptocurrency is said to be the biggest technological leap since the Internet was introduced. With its promise of decentralization and swifter modes of transferring assets and value, cryptocurrency is making headlines and marking its spot in the financial industry. What is it about this digital masterpiece that makes the whole world buzz with excitement? Read on and learn more about cryptocurrencies and how they work.

In 2009, a white paper penned by Satoshi Nakamoto contained a possible solution that could eventually improve the finance and banking industry. In this white paper, he discussed a digital coin that can travel seamlessly across a digital platform called a ‘blockchain’. Since then, various altcoins have appeared and made their way into the economy. 

Cryptocurrency is experiencing a wide-scale adoption across the globe, especially among young investors.

One of the most common questions surrounding cryptocurrencies is its security. Due to its intricate and revolutionary technology, there is a lot of speculation and negative feedback about its safety. If you’re interested in delving deeper into digital assets, here is some information to debunk the myths and misconceptions about digital assets. 

Blockchain: The ledger of all things

Cryptocurrency runs on a digital platform called the blockchain. In this vast ocean of data, there are miners that confirm and process a large amount of information from crypto transactions. Also known as the Distributed Ledger Technology, this sharing network is protected by an amalgamation of cryptographic codes that protects every transaction details. 

Once a transaction is recorded in the blockchain, there is no way to alter or tamper it. Even if this were possible, a hacker must untangle all the hashes after it until he reaches the first recorded transaction in the ledger. Additionally, the blockchain features full anonymity so you don’t have to worry about your information being publicized. Your key address is the only data visible in the blockchain.

Cryptocurrency: Is it safe or not?

Before we discuss cryptocurrency’s security, you must first understand that there are different levels of security depending on what aspect you want to tackle. All in all, the security of your transactions depends on how you follow the safety precautions.

  • Transactions 

Cryptocurrency transactions travel within the blockchain. As discussed in the previous section, the blockchain is an unbreachable fortress protected by cryptography. However, you can still run the risk of getting hacked if you use sites without SSL protection or by opening links with malware. 

Additionally, using dubious browsers when transferring your funds can also compromise your security. So, follow safety protocols to guarantee a fool-proof gateway for your transactions. 

  • Investments 

There is no such thing as a safe investment. While there are investments that are relatively more stable than others, all investments have an element of risk that you should be willing to take. The same goes as well for cryptocurrency. Even more so because they are prone to sudden shifts in value due to their volatility. Fortunately, there are ways you can follow to safeguard your precious assets from drastic market changes. 

One strategy you can do is use stablecoins. Stablecoins peg your investments after real-life commodities. One example is Tether that has a 1:1 ratio with the US dollar. Additionally, you can lessen your investment risks by tracking the market regularly.

Safest crypto coins in the market

  • Ethereum –  Ethereum holds the second spot in the crypto charts as the most-used and functional digital asset. It runs on a decentralized software platform that can be used to create smart contracts and decentralized apps (Dapps). 

What makes Ethereum appealing to users is that it guarantees full transparency and the absence of a third-party. Currently, Vitalik Buterin announced that Ethereum 2.0 is on the way, which he claims is a faster, safer and more efficient version of the first released Ethereum. 

  • Ripple – While Ripple experienced a rough patch recently, it’s still one of the most secure crypto coins in the market. With a clock time under 5 seconds, XRP is recorded as the fastest performing coin in the charts. Additionally, it’s On-Demand Liquidity (ODL) feature is widely used by major banks in the world, a factor that can attest to its reliability. 
  • Bitcoin – Bitcoin remains as the best performing coin in the market. Despite its recent value crash in May, it immediately regained its position on top of the list.

Safety hacks: Tips on how to keep your crypto assets safe

  1. Use reliable wallets

Investing in digital assets means that you should also invest in good wallets. You have two options when it comes to choosing a wallet: hot or cold. For utmost security, your best option is a cold wallet. 

Cold wallets come in different forms such as flash drives or paper wallets. The good thing about this type is that you can store your funds offline, which lessens the risk of your funds getting hacked. 

But if you’re a trader and you want to access your funds right away, you should opt for hot wallets. Hot wallets are apps or websites where you can store and trade your cryptos. 

  1. Don’t put your funds in one place 

Using one wallet for all your crypto investments is never a good way to store your funds. Not only does it pose a risk to your entire fund’s safety, but you can also overspend your cryptos without realizing it. One way to keep your funds safe is to separate them in different wallets. Budget them depending on your need, so you won’t end up losing them in one go. 

  1. Do your research 

Delving into the world of cryptocurrency requires intensive research. Before you dip your toes into the crypto market, make sure that you’re equipped with the knowledge to keep your assets safe. Having vital information at your fingertips can save you time, money, and resources. 

Cryptocurrency may be the answer to the world’s many economic problems. Right now, it’s on its way to change the traditional financial system as we know it. With this kind of technology, the world is presented with different opportunities to improve everyone’s standard of living. All you need to do is learn how to harness it to its fullest potential. 

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