The crypto industry has seen a surge in scams, leading to over $1 billion in financial loss in 2021 alone. However, you don’t have to give up on investing in cryptocurrencies. Here are six practical tips to help you protect your finances while exploring this new asset class.
1. Do Your Homework
Before buying cryptocurrencies, research the following factors:
- When and why the coins were created
- The technology behind them
- How they are distinct from other offerings
- The number of coins being produced
- The unique value they provide
Understanding these aspects will help you avoid currencies created solely for profit. Also, ensure that the websites you use to buy cryptocurrencies are secure and reputable.
2. Be Careful Who You Trust
Avoid taking advice from celebrities, social media, internet forums, or anyone without solid financial credentials. Misleading advice can lead you into a scam.
3. Secure Your Crypto Wallet
Choose a digital wallet developed by a reputable company. Avoid sharing credentials and logging in on public wifi. Implement two-factor authentication and password protection. Consider using multiple wallets and cold storage devices to minimize the risk of a breach.
4. Use Multi-Factor Authentication
Multi-factor authentication adds an extra layer of security. Even if a hacker obtains your login credentials, they will need a code sent to your phone or email. Receiving an unexpected code can alert you to a breach attempt.
5. Monitor Website URLs
Avoid spoofed websites and ensure the web address is legitimate. Look for “https” (not “http”) before logging in. This ensures the website is secure and reduces the risk of falling victim to a scam.
6. Consider Traditional Investments
If you want to minimize the risk of a crypto scam, consider investing in ETFs or stocks impacted by crypto performance. These regulated investments offer exposure to the crypto industry with less potential for scams.
Crypto scams are rampant, but by following these six tips, you can keep your money safe. From doing thorough research to securing your digital wallet, these practical steps can help you navigate the crypto world with confidence.