Crypto trading has grown immensely as more and more people are drawn towards this decentralized market. It is one of the most highly volatile markets and the top preference of today’s investors.
However, keeping all the benefits aside, crypto has a lot of shortcomings and security issues that need to be addressed.
Cryptocurrency comes with high risk. Unlike traditional banking, you put your money on the line as there is no guarantee or protection. Even a small human error or cyberattack can result in huge losses.
Today, it is not uncommon to see cyberattacks on cryptocurrency trading platforms, resulting in the loss of millions of dollars.
If you want to stay safe while trading Bitcoin or other cryptocurrencies online and want to protect your assets, it is recommended to always use a Virtual Private Network (VPN) that serves as a protective shield when you are trading online.
If you don’t want to spend money on VPNs, there are plenty of the best free VPN services that you can use to get some level of security and anonymity while trading crypto online.
In this blog, we will explain how a VPN helps protect your cryptocurrency and what are some of the most common security risks associated with crypto trading that you should be aware of.
Online security risks associated with Cryptocurrency
Before discussing how a VPN protects you while trading cryptocurrencies online, let’s look at some of the most common security risks associated with crypto trading that you should be aware of:
1. Fake cryptocurrency exchanges
Fake crypto trading exchanges are very common these days, but they are not legal. Most crypto trading companies use different tricks to increase the overall trading volume. It is then used to generate fake reports to show inflated figures. In these reports, more than 90% of the crypto transactions are fake.
Therefore, when it comes to trading cryptocurrencies, make sure to use legitimate exchanges and stick to authorized personnel only.
Cryptojacking is an attack where a hacker takes control of your PC or other devices to mine cryptocurrency without you knowing about it. This has become quite common as criminals compromise accounts using phishing and other techniques. As a result, you bear all the costs of mining, and the coins are deposited in the hacker’s account.
Therefore, using a VPN is highly recommended for crypto trading as it allows you to trade cryptocurrency anonymously.
3. Cryptocurrency ICO fraud
ICO fraud occurs when startups in the cryptocurrency market disguise themselves as legitimate when in reality, they are fake. Once you trade with them, you might lose all your money. Fake ICO’s with coins scam people into investing in their company and shut down after stealing all the money.
One recent example is the Squid coin that was launched after the famous Netflix series Squid Game. The criminals pulled a “rug pull scam” stealing millions of dollars.
Why do you need to use a VPN for Crypto trading
Now you know some of the most common security threats associated with crypto trading. The best and most efficient way to secure your crypto trading from hackers is to use a VPN, as it not only protects against cyber criminals but also safeguards your devices against malware and malicious software.
So, how does a VPN protect your cryptocurrency?
- A VPN encrypts your data and traffic making it harder to track online. VPNs use 256-bit AES encryption that can withstand brute attacks. With a VPN, even if someone does get hold of your information, they can not decrypt it.
- VPNs add another layer of security to protect against viruses, malware, and phishing attacks as well.
- VPNs also help you mask your real IP address to prevent hackers from tracking your online activities. It assigns you a new IP according to the country server you are connected to. This way, you can buy and sell cryptocurrency online anonymously.
- Most VPNs also offer other amazing features, such as a kill switch. A Kill Switch automatically disconnects your internet in case of a sudden VPN connection drop. It makes sure your internet connection is encrypted all the time when trading cryptocurrency so the hacker cannot intercept your data.
- Trustworthy VPNs do not store any user logs to help you achieve online anonymity.
Considering the sharp rise in cryptocurrency scams, using a VPN along with other security tools has become necessary. A good VPN helps you protect your identity online and makes sure your data is encrypted. This way, no one can steal your money.
Most cryptocurrency exchanges use end-to-end encryption, so using a VPN adds another layer of security to protect your currency. However, keep in mind that cryptocurrencies like Bitcoin are not anonymous, as they are pseudonymous. So anyone can track your transactions, but by using a VPN, you can achieve anonymity as it hides your IP address.