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Are Crypto Transactions Safe?

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In short, yes, crypto transactions are safe, although there are some recommendations and measures that ensure crypto transactions bypass potential risk.

Keeping Crypto Transactions Safe:

Hot vs. cold crypto wallets

What’s a hot wallet?

A hot wallet is connected to an online crypto exchange giving it more risk of being exposed to hacks. Hot wallets are beneficial for crypto consumers to have direct access to exchanges. Still, protecting hot wallets with a strong exclusive password is recommended to stop potential attackers from easily acquiring credentials and accessing crypto funds. Hot wallets appeal to active traders or those with confidence in risk assessment. For safer storage, cold wallets are recommended.

What’s a cold wallet?

Cold wallets are more secure than hot wallets and cannot be compromised because they’re not connected to the internet. Cold wallets store user addresses and private keys and work in synch with compatible computer software.

Further, a combination of both can increase the security of crypto transactions. It’s recommended to store most crypto in cold wallets. Hot wallets are recommended for storing small amounts for daily use. 

Offline private keys

A private key works as a password to access crypto wallets. In some cases, private keys are stored online or on the network hosted by the wallet. If the network is ever compromised, private keys can be exposed. The wallet and funds can be breached if a private key is stolen or copied.

Offline storage for private keys is highly recommended. Storing private keys on offline devices prevents any potential intrusion. However, it’s good to know offline storage is not an at-hand solution. To complete a transaction, a USB needs to connect to an offline device where a private key is used to verify it. 

VPNs

Virtual Private Networks (VPNs) secure online communications. VPNs reroute traffic and encrypt data traveling between a device and an online endpoint. VPNs improve the security of crypto transactions and ensure no one can monitor online traffic or intercept data when sending or receiving crypto payments.

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ForumPay does not disclose financial advice. Anything shared is strictly to inform, entertain, or share thoughts and ideas. Please seek a registered financial advisor if you are looking for financial advice.

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