On the blockchain, smart contracts are codes that execute a series of instructions
The rise of cryptocurrency has given hackers the opportunity to exploit loopholes in the blockchain and scam millions of users around the world. As the online crypto industry draws in new users at an unprecedented rate, the number of hacking incidents will undoubtedly increase in the coming days and weeks, industry experts warn. Some already estimate that between January and July of this year, more than $650 million has been the target of major cryptocurrency thefts, hacks and fraud. There are many more to be reported due to a variety of reasons, including a lack of understanding of the technology.
Like any industry, cryptocurrency is not immune to theft and scams. However, experts advise investors to fully understand the risks associated with trading these digital assets. The best thing a trader can do to protect their investments is to make themselves aware of the potential pitfalls and common mistakes that others have made.
Here are a few tips:
1) Research thoroughly
Investors should always invest time in thoroughly researching the cryptocurrencies or other digital assets they want to invest in. They can start with the official website of the crypto project. Learn more about the founders, developers, and current donors. Find out where the project is for sale. These should give an initial indication of whether the project is questionable or not.
2) Deceptive websites
Don’t fall prey to deceptive websites. A surprising number of scam websites similar to the official website are regularly set up. Amateur investors often fail to distinguish the fake from the real. When in doubt, ask those who have been in the industry for a while. Beware of phishing emails.
3) Fake mobile apps
Another frontier to protect is downloading crypto trading or exchanging apps from verified sources. Scammers often trick investors through fake apps. While these apps are quickly identified and removed, that doesn’t mean fake apps will go away anytime soon. Look for obvious spelling mistakes in the copy or in the name of the app. Ask yourself if the branding is thin or has an incorrect logo.
4) Watch out for smart contracts
On the blockchain, smart contracts are codes that execute a series of instructions. While 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 could be weaknesses within the project.
5) Keep your wallet safe
Finally, protect your wallet wisely. All wallets have two keys – private and public. Make sure that the private key is not made public under any circumstances. Despite this, there are risks with wallets and cold wallets are usually the safest option for storing private keys.
