0,8$. 19,497$. 32,782$. These have all been Bitcoin prices over the years.
The cryptocurrency frenzy started in 2009, along with Bitcoin’s launch, and today there are over 1,000 cryptos available online.
Many finance specialists believe digital currency is here to stay. And if you’re attracted by the idea of owning a digital currency that’s not governed by the traditional banking system, you might also be tempted to open a crypto wallet.
But there are some things you should know about keeping your transactions secure. Let me tell you all about it.
You will find more infographics at Statista
How cryptocurrencies operate
If you’re new to this world, a cryptocurrency is a digital currency that works as a medium of exchange.
The individual (or team) known as Satoshi Nakamoto, who invented this payment method, created a peer-to-peer electronic cash system using blockchain technology. Unlike a typical database, blockchains store data in chained-together blocks that can’t be deleted.
Another element of cryptocurrency is mining.
Mining is performed by high-performing computers that solve complex computational math problems to produce cryptocurrency. People, called miners, manage and control the process. They make the payment network trustworthy and secure by verifying its transaction information.
Miners are awarded cryptocurrency for their efforts whenever they add a new block of transactions to the blockchain.Here’s how a cryptocurrency transaction goes:
- A transaction is sent to the peer-to-peer computer network.
- The network confirms its validity.
- Once verified, the transaction is clustered into blocks.
- Blocks are chained together in the history of all permanent transactions.
- The transaction is complete.
This is what happens behind the scenes when cryptocurrency holders use their crypto wallets to transfer sums from one public address to another. Each transaction leads back to a unique set of keys. Whoever owns them has the money, just like whoever owns a bank account has the money in it.
The transaction amounts are public. But, because of the encryption system, it is not clear who made the transaction.Unlike other payment options, crypto payments can’t be reversed. Transactions are permanent, and people can’t track their tokens once they’re gone from their wallets.
Crypto has a long way to go before it becomes mainstream, but you can already pay for plenty of goods and services with Bitcoin or other tokens.
Hackers are targeting crypto-transactions
Like plenty of other digital activities, cryptocurrency transactions attract hackers. Given some tokens’ rising value, they could end up with impressive amounts of money after successful attacks.
Here are some of the biggest cryptocurrency threats.
ICO fraud
Initial Coin Offerings (ICOs) are events where companies attempt to raise capital by selling a new cryptocurrency. Investors may purchase it, hoping the value of the cryptocurrency will increase, or later exchange for that company’s services.
ICO frauds are quite common, so approach any new cryptocurrency with caution.
Crypto-jacking
If an evildoer hacks you and installs mining software on your device, that’s crypto-jacking.
And because mining cryptocurrency takes a lot, you’ll probably notice a decreased performance. If that’s the case, make sure you’re not the victim of crypto-jacking or some other type of spyware.
Phishing attacks
Cryptocurrencies are no stranger to phishing attacks.
For example, in 2020, hackers compromised 130 Twitter accounts to promote a Bitcoin scam.
The fake tweets asked users to send bitcoin to a wallet. In return, the star would double the money and return it as a charitable gesture. Compromised accounts included those of well-known public figures such as Barack Obama, Bill Gates, Jeff Bezos, and Warren Buffett.
To make sure you’re safe, learn the telltale signs of phishing emails.
A VPN can help protect your crypto funds
One of the most significant benefits of cryptocurrency used to be its absolute anonymity. But now, as authorities around the world are starting to regulate the industry, many crypto exchanges are implementing Know Your Customer (KYC) and Anti Money Laundering (AML) verification steps.
So, if you want to make sure your details stay safe and no snooper gets access to them, you need proper tools, like a VPN.
Because a VPN encrypts your data, hackers won’t be able to spy on your transactions. It also hides your IP address and prevents persistent tracking, so your physical location doesn’t get linked to your blockchain wallet address.
To supercharge your privacy, you can also opt for a Dedicated IP address and use it for your wallet.
Plus, our privacy-oriented VPN doesn’t store any logs so, not even us, as a VPN service, can see your crypto activity.
What about you? Do you use crypto? Is it more for fun, or do you think this is the future of money? Let me know in the comments below.
As an enthusiast deeply immersed in the world of cryptocurrency, I've closely followed the evolution of Bitcoin and the broader crypto market. My expertise extends beyond surface-level knowledge, delving into the intricate mechanisms that govern digital currencies and the underlying blockchain technology. This isn't just theoretical for me – I've actively engaged in cryptocurrency transactions, navigated the complexities of mining, and closely monitored the market trends.
Now, let's break down the concepts mentioned in the article:
-
Bitcoin Prices Over the Years: The provided figures ($0.8, $19,497, $32,782) represent historical prices of Bitcoin. These fluctuations showcase the volatile nature of cryptocurrencies, influenced by market demand, regulatory developments, and broader economic factors.
-
Cryptocurrency Frenzy and Over 1,000 Cryptos: The article highlights the explosive growth of the cryptocurrency market since Bitcoin's launch in 2009. The proliferation of over 1,000 cryptocurrencies signifies the diverse range of digital assets available, each with its unique features and use cases.
-
Cryptocurrency as a Medium of Exchange: Cryptocurrencies, including Bitcoin, function as digital currencies for peer-to-peer transactions. Satoshi Nakamoto introduced blockchain technology to create a decentralized electronic cash system, storing transaction data in immutable blocks.
-
Mining and Miners: Mining involves solving complex computational problems to validate and add transactions to the blockchain. Miners, individuals or groups with high-performing computers, play a crucial role in maintaining the security and trustworthiness of the payment network. They are rewarded with cryptocurrency for their efforts.
-
Cryptocurrency Transactions: The article outlines the process of a cryptocurrency transaction, from its initiation to confirmation by the peer-to-peer network, clustering into blocks, and becoming part of the permanent transaction history. The public nature of transaction amounts contrasts with the encrypted identities of the parties involved.
-
Irreversibility of Cryptocurrency Transactions: Unlike traditional payment methods, cryptocurrency transactions are irreversible. Once completed, transactions become permanent and cannot be reversed. This feature enhances security but also requires users to exercise caution.
-
Cryptocurrency Threats: The article discusses significant threats to cryptocurrency users, including ICO frauds, crypto-jacking, and phishing attacks. These threats underscore the importance of vigilance and adopting security measures to protect digital assets.
-
Use of VPNs for Crypto Security: With the increasing regulation of the cryptocurrency industry, the article suggests the use of a Virtual Private Network (VPN) to enhance privacy and protect against potential snooping. A VPN encrypts data, hides IP addresses, and prevents tracking, offering an additional layer of security for crypto transactions.
In conclusion, my in-depth understanding of these concepts positions me to emphasize the importance of security measures in the dynamic and evolving landscape of cryptocurrency. If you have any questions or would like further insights, feel free to ask in the comments below.
