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The allure of cryptocurrency lies in it being a decentralized system, with no single entity or party having control over the same—it is stored in a wallet, accessible only to the owner, who has its key. However, if the key is lost, the wallet and the money it contained gets lost. Storing the key locally or on an offline backup device, or using online services to store this information securely, are popular options.
With the rise in the value of cryptocurrencies like bitcoin, they become even more lucrative targets for unscrupulous people. 2017 saw the rise of cryptocurrencies by 2700 percent, which sparks a major increase the risk of hackers and cyber thieves.
Cryptocurrency needs to be exchanged for fiat currency to store it using more traditional means, or even to purchase goods, for which, one has to use third-party exchange services and markets. The easiest way to keep the currency safe is to deposit funds, exchange them and withdraw them quickly.
Neither fiat currencies nor cryptocurrencies are safe from scams—successful scams lead to the loss of nearly $9.1 million in cryptocurrency daily. The emergence of new coin exchange has become a highly popular scam—the platforms require customers to deposit funds before doing business, and reap benefits with each transaction. The Ponzi and pyramid schemes are other popular scams.
The extreme vulnerability of cryptocurrency to cybertheft makes it highly essential for users to try to protect themselves. The first step to this, in case of cryptocurrency, is to keep the key safe and have a secure backup. Further, cryptocurrency users should only carry out transactions with trustworthy people—online rating systems can be used to find legit buyers and sellers. Lastly, users can utilize more secure tools, exchanges, and cryptocurrencies.
The use and storage of currency require user vigilance to lower risks and vulnerabilities.