DeFi

Security Concerns in the DeFi World

Grow the Empire

By having DeFi as an alternative to a centralized system, the world is moving towards achieving decentralized power, backed by high-tech blockchain. With each passing day, people are pouring their money into cryptocurrencies to have more financial liberty. Cryptocurrency is a digital currency, a secure digital ledger that records crypto transactions. However, crypto investments are still very risky and are prone to cybersecurity concerns. It is reported that billions of dollars are lost, manipulated, and stolen due to cyberattacks annually. 

Today, let’s analyze the loopholes in cryptocurrency and ways to overcome cybersecurity issues crypto investors face.

Frequent Cybersecurity Concerns

It is important to be aware of some of the frequently occurring cybersecurity activities leading to serious issues for crypto traders. The following are some of the cybersecurity concerns associated with cryptocurrency investments that you should be aware of.

 

Unreliable Trading Platforms 

With the increase in cryptocurrencies, the number of exchanges and trading platforms is also increasing. However, only some of these sites and exchanges are reliable. The trading platforms are competing to attract more and more investors and some of them resort to misinformation to get more investments. As a result, users often lose their funds. 

 

Access to Private Key

Users use a “private key,” which is just a long password code, to access their digital assets. People often save them on their phones or laptops which is risky. Once fallen into wrong hands, that private key will allow hackers to access your computer and log into your online account. Since virtual currencies are not properly regulated, if funds are lost, there is no way to get your money back. 

 

Poor Comprehension 

Investors may suffer because cryptocurrency is still a relatively new idea. Blockchain technology, cryptocurrencies, and crypto exchanges are all by definition complex. Even investors might have trouble understanding it. Cryptocurrency is frequently less secure than traditional assets. Therefore, if a user misunderstood the information and makes a wrong decision then it cannot be undone, making it riskier for investors.

 

Verifying users 

Verifying a user’s identity is the process of user authentication. It can be used to filter out unauthorized users from accessing devices and decentralized applications.  It takes place remotely and is a crucial component of cybersecurity.  Two-factor authentication, or 2FA, might be a term you’ve heard of. To log in to your account, you need codes from two different sources i.e., email and SMS. The concept behind 2FA is that verifying users twice can ensure better security for users.

Identity Verification as a Service (IVAAS)

It is another method of user identification. In the context of cybersecurity, it makes use of a number of techniques, including biometric authentication, face recognition or fingerprint scanning, and blockchain technology, to confirm a user’s identity. Users can authenticate themselves via IVAAS without jeopardizing their privacy. You don’t need to provide anyone else access to private information like a bank account or credit card data; all you need is a smartphone and an internet connection. Users can now conduct secure transactions with one another without having concerned about hackers stealing or altering their personal data.

Choose highly secure wallets 

To prevent any online attacks from unidentified networks, selecting secure and reliable wallets is advised. Additionally, passwords are crucial in preventing unwanted cyber-attacks. Maintaining weak or simple passwords always encourages more similar attacks. However, maintaining a robust and moderately sophisticated one would reduce the likelihood of hacking. Never use the same password for all of your accounts; it must include lower- and uppercase letters, a number, a symbol, etc. 

Final Talk

As you can see, cybersecurity is a serious problem in the cryptocurrency industry. It’s a complicated subject with a lot of different things to think about. To keep your digital currency wallet safer and lower your risk of getting hacked or losing money as a result of a cyberattack, there are a few easy actions you can do right away.

We hope that this blog has helped you better understand how to safeguard yourself from online dangers like phishing and fraud. Remember: defending yourself from human error, such as using weak passwords or sharing your information with unreliable people, is just as important as keeping your computer protected from malicious activities.