2019-12-20 2017-11-21 Cryptocurrency exchange: trust or not? Serge Salimov 2019-12-202017-11-21

With cryptocurrency appearance, cryptocurrency exchanges appeared in the market. Their amount and popularity are growing constantly. So, a question arises, whether one can trust money to a cryptocurrency exchange or it’s better to choose more usual ways to invest.

Actually, trusting your money to be managed by someone else, you should understand that there are certain risks. Whether it is a bank account, Forex or cryptocurrency exchange. But to keep a large amount of cash at home is not safe too; the apartment can be robbed, there can be a fire, inflation depreciates money.

Why a deposit is better than storing your money “under the mattress”? Interest rates, capitalization, no temptation to waste the money. Forex deposits yield more profits than bank ones. An average trader can increase the deposit by 30-40 % a year, a professional one – by 80-150%. But it is a risky business. You can well miss the price movement and suffer losses. Forex advantages: whether you trade independently or work with an investment fund, you always can make a profit.

Now, let’s turn to cryptocurrency exchanges. The second popular news after bitcoin surge is that about another cryptocurrency exchange crash, hacking attacks and predictions of soon cryptocurrency collapse. Sceptics are gloating, and, no matter how much bitcoin costs, predicting its soon crash.

Why a deposit is better than storing your money “under the mattress”? Interest rates, capitalization, no temptation to waste the money. Forex deposits yield more profits than bank ones. An average trader can increase the deposit by 30-40 % a year, a professional one – by 80-150%. But it is a risky business. You can well miss the price movement and suffer losses. Forex advantages: whether you trade independently or work with an investment fund, you always can make a profit.

How to secure your savings, if you chose cryptocurrency?

don’t store the whole amount of savings in an exchange web server. Keep on the account only the reserve, needed to trade during a few days;

cryptocurrency purse or wallet is the first thing, you should get if you decided to buy cryptocurrency. Purses can be online or hardware, which look like USB flash drive. I would recommend using cold wallets, for example Ledger, where the transaction is confirmed inside the crypto chip and is not transferred out of the device;

in all the other cases, including the storage on a computer, flash drive or a paper wallet, to confirm a transaction, the secret key needs to be put in;

use only licensed software and set up brandmauer and anti-virus program, all that is necessary to protect your computer;

don’t accept files from unknown people and don’t open them in your email, whether it is a photo, a video, a text file or a system file. Keylogger is a software, tracking all user’s actions, from pushing a key to a cursor movement. It is actively used by hackers and can look like any file;

use password manager. Besides passwords storage, they have many useful functions: protection from phishing, getting an access to your logins and passwords; passwords generating, due to this, passwords are various. They can be hacked only by a quantum computer.

Cryptocurrency is a new and interesting phenomenon. Of course, there are some threats and dangers. But you shouldn’t be afraid of them, you should secure yourself in a right way. The same is with investing in cryptocurrency exchanges. A risk? Yes, of course. But there is some risk in any investing. Even in keeping your money in a safe at home.

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The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.