Cryptocurrencies: if you're going to use them, you'd better be careful

Older people will certainly remember: in the early days of bitcoin, anyone who publicly declared themselves in favor of the digital currency was considered crazy. Tokens were traded at low prices and their exchange rates were (even more) unstable. The idea of saving up money that was not regulated by a government agency and to make transactions that depended on its own network of users to be verified was a scary one.

Over time, cryptocurrencies have grown in popularity and are now the "darlings" of many people – and some countries have even surrendered to the benefits of this technology and are now developing digital currencies of their own to replace, in a relatively distant future, physical money altogether. Several altcoins have been created, and buying or selling this type of asset has become a much more common practice (although the market is still volatile).

However, as usual, cybercriminals have also noticed this trend and have started scamming cryptocurrency enthusiasts. The threats reach the end user in the most varied ways possible, and it is essential to be always ready to identify them and avoid the dangers - after all, no one wants to lose their savings because of a one-time slip-up, right?

The Dark Side of Decentralization

The most remarkable feature of digital currencies is their biggest weakness: because they are not controlled by a regulatory agency or a banking institution, it is very difficult (and sometimes even impossible) to track transactions effectively. This means that if you transfer bitcoins to a fraudster, you will probably not get your money back and won’t be able to track the transaction either, even with the help of the authorities. Therefore, it is crucial to be careful before using cryptocurrencies to make any kind of financial transaction.

Another constant risk in this industry are exchange houses. They allow you to exchange physical money for digital currencies. There are many reliable options on the Brazilian and international markets, but there are also fraudulent exchange houses that receive your payment and never exchange the currency - or even make the exchange at totally unreal and absurd rates. Therefore, it is worth doing a lot of research before buying your bitcoins.

It is also becoming increasingly common to see fraudulent ICOs (initial coin offerings). We are talking about those cases where an alleged investor convinces you to buy large amounts of a new coin that is soon to be launched on the market, promising astronomical profits when it starts trading. However, this is a scam – often times the offered coin does not even exist, will probably never exist, and the investor is just a scammer.

Where is my wallet?

In the same way we are careful about where we keep our cash, caution is recommended when storing your cryptocurrencies. The number of malicious digital wallets you can find is gigantic. Always prefer to keep your savings in exchanges that allow you to store your balance in the cloud - this way you can access your digital money anywhere, from any device, without needing to worry about having a local app on your phone.

Article translated from: Criptomoedas: se vai mexer com elas, é melhor tomar cuidado — Perallis Security