Bitcoin users are a high-value target for internet criminals all over the world. Over the past few years, it has become apparent that there are multiple ways that thieves will try to steal one’s cryptocurrency, and being vigilant is of the utmost importance. Some of the tactics used to steal people’s BTC are becoming far more common than others, though.
#6 Trusting Online Wallets
The most common way of losing Bitcoin funds comes through theft, -not just by having a wallet on a computer or mobile device getting drained by assailants. Third-party service providers should not be trusted either. Online wallets, for example, are a legitimate threat to people who store Bitcoin funds there for an extended period. People should move their money to a software or hardware solution under their full and sole control at all times.
#5 Onlne Investment Sites
But online Bitcoin wallets are not the only website-based threat to cryptocurrency users. Scam sites in the form of investment offerings, cloud mining, MLM schemes, and other Ponzi Schemes are far too common as well. At The Merkle, we have put together an overview of potential Bitcoin scam sites, and we will continue to update that list whenever possible.
On the software front, ransomware remains a very peculiar threat to keep an eye on. Not only does this malicious software encrypt computer files, but its developers also demand a ransom to be paid in Bitcoin to revert the encryption. Paying that fee is not advisable, as it is no guarantee that the decryption key will be provided. If computer files are encrypted, so is the Bitcoin wallet software, rendering it virtually unusable.
#3 Various Types of Other Malware
Malware, not to be confused with ransomware, is a significant threat to Bitcoin users around the world. If a computer or mobile device running a Bitcoin wallet gets infected with malware, assailants can take over the device and any of its associated actions. Hackers could drain one’s wallet with ease, as they usually have backdoor access to the device in question.
#2 Malicious Bitcoin Wallet Software
Bitcoin wallet software itself can also be a major problem, depending on which tools one uses. Particularly the Apple App Store has become home to many malicious Bitcoin wallets in recent months, and more of them seem to get approval every month. It is plausible to assume that there are some shady offerings on Android as well. Speaking of which, never install a Bitcoin wallet APK that does not come from the official Play Store, as those files can be laden with malicious software.
#1 Human Error
Even if one manages to avoid all of the above pitfalls, which is not overly difficult to accomplish, there is still the risk of losing the wallet itself. Information stored on computers or mobiles, or even hardware wallet solutions, can always get lost due to some unexpected event. Backing up the wallet information, as well as its private key, password, and recovery seed are of the utmost importance.
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