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Monday, 18 June 07:43 (GMT -05:00)



Foreign exchange market

What is the best place to store cryptocurrencies?


The most common reason why people get their digital currencies stolen is that their e-wallets are often poorly secured and therefore vulnerable. Apparently, such apps do have vulnerabilities. However, there are certain tips and tricks that will help you to increase your security when it comes to storing digital currencies, Market Leader reports.

 

 

 

 
According the recent research data released in late August, mover 30 000 Euthereum users have already fallen prey to various scams. According to New York-based company Chainalysis, the average loss amounts to $7500 per victim. The experts say that it’s all about insecure e-wallets.
 
For those of you who don’t know, an e-wallet is a certain app providing you with the access to your digital funds. According to Alexander Shvets, product manager for blockchain-based advertising ecosystem Papyrus, an e-wallet resembles the key to a deposit box. The difference is that this is not a physical box inside a bank vault but rather a box in a digital crypto-vault.
 
Such a digital vault allows you to take control over your balance, transfer funds and exchange one currency for another. Most of those e-wallets out there make it possible to store various digital currencies at a time, which is fairly convenient, since there are hundreds of digital currencies, and the number is still growing. So, the software allows you to work with multiple currencies of the same type.
 
Apparently, the most popular digital wallets are those designed for Bitcoin, the world’s first and most popular and expensive cryptocurrency. The wallets for Ethereum are the second most popular apps of that kinds. As we have already said, there are multi-currency e-wallets allowing you to accumulate multiple digital currencies in one app.
 
According to Dmitry Lazachev, co-founder of crypto-bank Wirex, says that all e-wallets out there can be divided into 2 major groups – the ones based on hardware and the ones based on software. Online wallets are often referred to as “hot wallets” since they allow you to transfer anytime you want provided that you are online.
 
The second type of e-wallets is not connected to the Internet. Such wallets are installed on a physical drive. The funds are stored in a “cold wallet” after registering the address with the blockchain. The funds can be withdrawn only after connecting the drive to a PC and going online.
 
According to Vasily Trofimchuk, co-founder of blockchain project BitCave, if your wallet is accessed using a private digital key, it’s a good idea to store the key the “cold” way – you can print out the private key or turn it into a QR code.
 
Always remember about risks when it comes to cryptocurrencies
 
As a rule, hackers exploit security system vulnerabilities or their victims’ imprudence.  According to Vladimir Smerkis, co-founder of cryptocurrency investment fund The Token Fund, the most common reason for hacking e-wallets is related to vulnerabilities in the smart-contact code or the wallet itself. Basically, this is how hackers managed to steal $460 million in Bitcoins from Mt.Gox. they exploited an error in the transaction system existing since day one. The secretly transferred tiny amounts of money from the exchange accounts to their personal accounts for a rather long period of time. Some vulnerabilities in the Bitfinex exchange allowed hackers to get access to thousands of e-wallets.
 
Fishing is another popular way for hackers to get the required info to access e-wallets. They create fake requests or even fake services to talk the user into providing their credentials. For example, during an ICO they fake a web address, and the victims are confident that they are investing in an ICO while they are just transferring money to the hackers. It’s easy to change a letter in the domain of a popular source and register a fake website. The victim opens a fake account (e-wallet) with the fake service and transfers fund to the hackers. With that being said, Masterforex-V Academy experts recommend that you always double-check the domain name and take other security steps to avoid getting hacked.
 
While commenting on the risks of losing digital funds, Masterforex-V Academy experts say that imprudence is the key reason why people fall prey to frauds and hackers. This holds especially true for the so-called lite e-wallets that require minimal credentials to get access – login and password.  
 
The most vulnerable are “hot” services that store the private key and the seed phrase required to restore the access. On the contrary, “cold” services are the most secure ones.

 

 

 

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