Even the economics of hacking suggests that cybercriminals will continue to drift towards digital currencies as they rise in value and become more prevalent in our daily lives. Not only that but tracking the work of hackers is often problematic since their footprints can be eliminated digitally. When a crypto account is attacked, investors do not have any support legally since the virtual coins are still unchecked by a central bank or a government entity. 

Moreover, it makes sense to wonder why you should bother securing your cryptocurrencies when some investors claim that Bitcoin is meant to be the world's safest financial solution. While Bitcoin and other cryptocurrencies themselves might be safe, the shaky link in the equation is something you may not expect: you are the weak link.  

To put it in simple terms, you're your own bank, and as such, you're entirely accountable for safeguarding your crypto assets. So, if you're a novice to crypto and still anxious about its safety, here are a few steps you can follow to protect your cryptocurrency investment.

Use Strong Passwords 

One simple way to safeguard your investments is by using strong passwords to protect your wallet and crypto-related accounts. Typically, cybercriminals use different devices to render stolen passwords, so the more difficult and longer your password is, the harder it is to crack.  

It's also essential to keep following the password best habits in mind:  

• A steady password will contain a long, complicated string of characters, so it's harder to crack. For instance, a secured password must contain at least 12 characters, with a generous string of numbers, symbols (most common ones are %$! #&), lowercase and uppercase letters.  
• Avoid using repetitive passwords for different accounts across multiple platforms. This will make you susceptible to a brute-force attack, especially if the password has been revealed in a previous data breach. 
• Make sure you log out of your account whenever you're done with a transaction. In doing so, you will avoid hackers trying to hack your account (particularly on public WIFI networks) by stealing your session cookies. 
• You can also use a password manager, so you won't have to type it out every time or forget it. 

Consider Two-Factor Authentication (2FA) 

Two-step verification is usually added to a variety of digital processes as an extra layer of security. Basically, with two-step authentication, you can only access an app or a website after you've passed multiple security checks. 

Therefore, aside from your typical password, the website may ask you to input a secret code sent to you either through SMS, email or push notification. These verification features usually expire after some time, making it difficult for a hacker to use past codes to access your account. 

Every cryptocurrency exchange supports two-factor authentication to better secure your account. Some offer simple SMS and email verification while others take it a step further with 2FA websites and apps like Google Authenticator. 

Secure Your Crypto Wallet 

The safety of your investments also depends on the type of wallet you use. Usually, you can choose between a non-custodial and custodial wallet for storing your coins.  

A custodial wallet is a digital wallet operated by third parties (typically MT5 cryptocurrency brokers and exchanges) who help secure your crypto holdings and hold your private keys. Even digital wallets are a user-friendly option to store your assets, that's still a bad idea for storing your crypto long term. And here is why: 

• Custodial digital wallets are centralized, which makes them not very much different from banks since they have control over your assets. 
• You won't have access to your private key, which you will always need the wallet provider to grant access to your own money. 
• Your wallet could get breached, leaving you with the possibility of losing your cryptocurrencies. 

On the other hand, a non-custodial wallet is decentralized since you're the sole custodian of your private keys. They will allow you full control of your cryptocurrencies and nobody can access your money without your permission. 

Always Use Cold Storage 

Cold storages are basically electronic devices meant to specifically secure your crypto offline. 

With a cold storage device, you can only process a transaction when it's linked to your smartphone or computer. Cold wallets are way more costly than hot wallets, however, if you can afford it, you will sleep like a baby knowing your funds are safe. 

Multi-signature wallets 

Multisig wallets are likely the intersection of non-custodial and custodial wallets. Each copy payer requires a private key for accessing the wallet but needs other copypayers keys to approve transactions from the wallet. 

Basically, Multisig wallets need two or more private keys to be provided at the same time before any money can be accessed or uploaded. Without the necessary number of keys, no one can perform transactions using the wallet. 

Lose your Keys, Lose Your Crypto 

Private keys are imperative when it comes to your cryptocurrency's safety. A private key contains a string of numbers that represents the cryptocurrency in your wallet. 

Your private keys will primarily prove ownership of cryptocurrency assets on a specific blockchain address and allow you access to your funds. 

Not to mention that, if it falls into the wrong hands, bad actors can have full access to your funds. As for your wallet security, the rule of thumb is, you don't own your fund if your private isn't in your possession. 

Since the value of private keys is obvious, it is important that you backup your private keys. But if you didn't back up your private keys and lose your wallet, you can quickly retrieve it by using a mnemonic phrase. A mnemonic phrase can be a user-friendly option for restoring your wallet, but you might still have to write it right. 

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Web3, cryptography, blockchain, and NFT, the industry introduced by Satoshi Nakamoto back in 2009, has spawned a trillion-dollar industry that will only grow in the coming years. As money continues to pour into space, so do thieves, hackers, and other nefarious criminals who see an opportunity to take advantage of those with no experience or are blinded by dreams of getting rich. As possibilities pile up, it becomes harder for attackers to deny those opportunities, thus increasing the number of thefts of cryptocurrencies that occur over the years and the total amounts that are generally compromised. 

Some words about Web3 

Web3, a blockchain-based decentralized online ecosystem, has become a subject of interest for crypto enthusiasts, tech experts, and more. For example, at the beginning of 2022, YouTube CEO Susan Wojcicki announced that Web3 represented a «previously unimaginable opportunity to grow the connection between creators and their fans; on the same day, two of her executives announced they were leaving to join … Web3 companies. The early development of applications involving cryptocurrencies and tokens (NFTs) has already been exploited to the advantage of cyber criminals, with $14 billion worth of cryptocurrencies stolen in 2021. Even though blockchain is one of the most secure technologies on the Internet, scammers or threat actors always find a way out by luring targets to click on a malicious link. Before people get excited about Web3, they should first look at some of the successful phishing scams launched recently.

What is phishing? 

Phishing scams have been around since before the advent of the Internet. Ever since homes had only landline phones, from time to time, a stranger could call home and lure an unsuspecting child into divulging information that could compromise the safety of that child or his family. In the internet age, this scam has evolved into tricking unsuspecting users into clicking on links,

who can then install various forms of malware or ransomware on their devices. Such software, when activated, can do anything from logging keystrokes to controlling a device. In the Web3 world, scammers use links differently – to lure users into divulging information that would allow an attacker to gain access to a user's wallet. Such attacks, if successful, can cause the victim to disclose seed phrases, private keys, and other data, which would give the scammers access to a user's savings. 

To read more about these schemes, visit here. 

The most famous phishing scams 

Since Web3 relies on blockchain technology, it is inherently secure. But the fact remains that people will always be vulnerable to manipulation, so phishing is one of the top attack vectors. In addition, blockchain allows attackers to remain anonymous, and stolen funds are usually non-refundable. If you want to know more about blockchain technology, you can visit the platform ICOholder. Check it out: icoholder.com. Let's look at some of the most common cryptocurrency and blockchain phishing scams that recently surfaced. 

Malicious AirDrops 

Airdrops are a marketing, or promotional tool organizations use to encourage users to use their products, services, or platforms. Companies usually drop cryptocurrencies (or money) to a user's wallet address in exchange for an action, such as launching a new product, offering a new coin, promoting a brand, or signing up on social media. Since free money attraction and FOMO (fear of missing out), airdrops have become popular among early crypto investors. 

However, airdrops are often used to run phishing campaigns. For example, through a giveaway, users may receive an email, SMS, or social media message about adding some random cryptocurrency to their wallet. The victim then goes to another exchange where she can sell the coin. The website asks victims to connect their wallets only to find out about the withdrawal of all funds. Last year, malicious NFTs sent over the air helped attackers steal hundreds of thousands of dollars worth of collectibles from the OpenSea NFT marketplace.

Ice phishing 

Like ice fishing in the real world, when a hole is made in a frozen lake to catch fish, ice phishing is a new Web3 clickjacking scheme that tricks users into assigning or delegating custom token endorsement to a cybercriminal. According to Microsoft, the user interface of the intelligent contract is such that it does not become apparent to the victim the transaction was fake. All the attacker must do is change the payer address to the attacker's address and wait for the victim to authorize the transaction by approving the attacker's account. (In the parlance of cryptography, a "spender" is allowed to spend on behalf of the owner.) 

In this case, the attacker modified the intelligent contract's user interface by injecting a malicious script into the front end of the smart contract. A similar attack occurred on the BadgerDAO exchange late last year when attackers used ice phishing to steal $120 million worth of cryptocurrencies. 

Fraudulent emails, websites, and social media accounts 

Phishing emails and fake URLs are one of the oldest tricks in the book. Similarly, Web3 is rife with copycat websites, social media accounts, and scam emails. From get-rich-quick schemes to pump-and-dump schemes, fake promotions, and promising new cryptocurrencies, email scams cost users millions of dollars each year. 

Last year, a leading cryptocurrency exchange lost $55 million because a cryptocurrency developer opened a phishing email with a malicious attachment. Cryptocurrency-related scams are growing exponentially on social media. Fraudsters often pose as genuine sources, celebrities, friends, or family members, encouraging users to visit fake websites or make fictitious investments. Two-faced developers resort to the famous scam as soon as investments pick up steam, leaving investors with worthless assets. The rug scam cost investors a whopping $2.8 billion in 2021. 

Phishing with a seed phrase 

In addition to the above three options for digital money fraud, it is worth talking about the features of using the seed phrase. 

The so-called seed phrase is a master key that opens access to all digital assets. It's like giving someone your bank account username and password. Some phishing scams trick persons into divulging their seed phrase, causing them to lose funds stored in crypto wallets. For example, phishers exploited Google Ads to promote their scam and redirect users to phishing websites or browser extensions that appear legitimate. As a step of the account registration or recovery process, the unsuspecting victim must go through a recovery step provided by the attacker. The perpetrator then uses the exact phrase to empty the victim's wallet immediately. Popular crypto wallet Metamask alerted users to Twitter bots that asked users to enter their seed phrases on Google forms as part of the account recovery process. 

Prospects for crypto crime 

With the increase in the number of new entrants into the cryptocurrency space, the number of users and the money they bring with them will grow significantly in the coming years. While this will be good for the common area, it will also lead to a new wave of scammers and scammers who will constantly find ways to deprive people of their money. As incentives grow, so will the number of scammers and the sophistication of their schemes to trick people into divulging information that allows thieves to access funds. 

New market entrants should be aware that the crypto world is very different from the traditional financial institutions that most people are used to dealing with. Banks and other custodians often have government or company-backed guarantees to protect their customers. The consequences of fraudulent charges on credit cards can be offset by card companies, while the bank or the government can insure the theft of bank deposits. 

In Web3, all this disappears. On the positive side, people become masters of their money, having complete control over their assets at all times. The downside is that the people involved in such an economy are solely responsible for keeping their funds safe, as there are no third parties involved in this new era of finance. Once the funds leave the crypto wallet, they effectively disappear. Therefore, users must be aware of the types of scams mentioned above. Additionally, users should consider additional layers of security, including implementing a blockchain monitoring solution for their wallets. Such a solution will allow users to perform cryptographic monitoring and inform the wallet's owner of any activity in the wallet. You can quickly implement free blockchain monitoring solutions without technical knowledge. With crypto monitoring, the user instantly receives information when a transaction occurs that they did not authorize. Such knowledge could let the user report such actions immediately and possibly enable enough time to freeze the transaction before the blockchain confirms it. 

Conclusion 

Cryptocurrency is an exciting and transformative space to be a part of. However, users should regularly remember that the area is still in its infancy, and many proposed technologies are still developing. Vulnerabilities exist, and Web3 contributors must remember to always be on the lookout to protect their assets. Awareness of common scams and implementing blockchain monitoring solutions or other lines of defense are critical to keeping funds safe and secure.