At first glance, cryptocurrency trading might seem like the digital wild west of investments. There are hundreds, if not thousands of tokens, various platforms to choose from, and a whole new technology to ponder.
While it all comes off as quite unsafe, there are actually various ways to make your trading experience as secure as possible. It’s really as safe as you want to make it. In this post, we’ll detail just how safe cryptocurrency trading can be.
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Is it Safe to Invest in Cryptocurrencies?
Right off the bat, investing in cryptocurrencies can be risky – but that’s an investment. Some assets are quite volatile, for instance, while others are more of a safe bet. That said, while earning or losing profits might be a bit risky, you can make the act of investing in these assets incredibly safe. Generally, this is done via a trading platform like Crypto Exchange or another cryptocurrency exchange.
How Safe is Trading on a Cryptocurrency Exchange?
Trading on a cryptocurrency exchange might be the safest way to do any digital asset trading. For one, these platforms generally offer top-of-the-line security for your storage and trading solutions.
Many are secure from DDoS attacks and other threats from hackers. While no online space is 100% hack-free, reliable exchanges put in proper precautions all the time. This also includes support for two-factor authentication (2FA). This means that you can’t log into an account without verifying a code on your mobile device. 2FA is a nice extra layer of security that keeps your assets secure.
That’s not to mention that trading on a cryptocurrency exchange means no risk of getting scammed. Top platforms vet which assets they list, ensuring you’re only investing in legitimate currencies. If there’s a platform with hundreds, if not thousands, of currencies, you can be sure they don’t check what they list too often.
What’s the Safest Way to Hold My Cryptocurrencies?
There are various ways to hold your cryptocurrencies – all of them under different types of cryptocurrency wallets. Basically, you can store assets on an exchange in an online wallet, or on your hard drive in a desktop wallet. Or, you can hold them in a mobile wallet app, an offline hardware wallet, or even a paper wallet.
Each wallet comes with varying degrees of security. Online and mobile wallets are often connected to the internet and are seen as the least safe. These are ideal for day traders, but even then, they hold the majority of assets elsewhere. Hardware and paper wallets are much safer, as they’re almost never connected to the internet. That way, hackers have no way of breaking into them. That said, they’re a bit of a hassle to access if you’d like to trade. Desktop wallets are a happy medium between the two.
Other Trading Safety Tips
As mentioned, cryptocurrency trading is as safe as you make it. There are dangerous, risky ways to invest, but you can opt for safer ones instead.
For instance, do your research on any platforms or currencies you want to trade on. Look at the teams behind these assets. See what others think about them on social media. Read some documentation and white papers. You’re risking your hard-earned cash here. Make sure you know what you’re getting into.
In that same vein, when you decide on something to invest in, don’t put in more than you can afford. This sounds obvious, but many new traders get FOMO and invest too much. Then, the asset will crash and they’ve lost their funds. It might take longer to (potentially) profit big by making healthy investments, but it will keep you in the game much longer.
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