Why your cryptos are not safe online?
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The excitement for cryptocurrencies such as Bitcoin, Ethereum, and many others continues to grow. Many investors choose to keep their assets on online exchange platforms such as Binance or Coinbase, or on online wallets. Although convenient, these solutions present security risks that are crucial to understand.
The enthusiasm for cryptocurrencies such as Bitcoin, Ethereum, and many others continues to grow. Many investors choose to keep their assets on online exchange platforms such as Binance or Coinbase, or in online wallets. Although convenient, these solutions present security risks that are crucial to understand.
1. Control of private keys
The first golden rule of cryptocurrencies is: "He who owns the private keys owns the cryptos." On an online platform, it is the platform operators who manage your private keys. You therefore do not have total control of your cryptocurrencies. In case of issues with the platform, your assets may be compromised.
2. Hacking risks
Exchange platforms are prime targets for hackers due to the enormous amounts of cryptos they hold. Despite their advanced security protocols, history has shown that even the largest platforms can be vulnerable to attacks. Hacks can result in irreversible loss of funds for users.
3. Risk of insolvency
The case of the FTX platform, once one of the largest in the world, perfectly illustrates the risk of insolvency. In the event of mismanagement or financial crisis, a platform can become insolvent, thereby jeopardizing the funds of users which, unlike bank deposits, are often not insured or protected.
4. Dependency on platform decisions
Online platforms are governed by their own policies, which can change without notice. They can impose restrictions on the withdrawal of your funds, increase fees, or even temporarily suspend access to your accounts in the event of extreme market fluctuations or regulatory decisions.
5. Regulatory issues
Cryptocurrencies operate within a legal framework that is still unclear and constantly changing. Platforms may be required to close or radically modify their operations based on new regulations, thus impacting access to your investments.
What to do to protect your cryptocurrencies and maintain complete control?
To maximize the security of your cryptocurrencies, consider using a hardware wallet. These devices allow you to keep your private keys offline, thereby significantly reducing the risk of hacking, platform insolvency, and other forms of financial loss. You thus regain full control of your digital assets.
In conclusion, while online platforms offer ease of use for buying, selling, and storing cryptocurrencies, they pose significant risks to the security of your assets. Taking proactive measures to protect your investments is essential in the cryptocurrency universe.