How to invest and protect your cryptocurrency – NBC 6 South Florida

How to invest and protect your cryptocurrency – NBC 6 South Florida

It’s an asset. It’s also a currency. You can mine it, buy it, or trade it. 

But do you know how to protect it? 

Political shifts have helped to create a bull market for cryptocurrency investors. Critics and skeptics are watching markets closely and new investors are looking to invest. And scammers are looking to take advantage. 

“With anything like this, there’s potential for fraud,” said St. Thomas University Professor Peter DelPiano.

Cryptocurrency experts say criminals are using gray areas in this emerging market to their advantage by benefitting off what you don’t know. 

The FBI ranked Florida second in the country for the number of cryptocurrency complaints their internet crime center received in 2023. The FBI’s Internet Crime Center reported consumers in the state lost a whopping $390 million. Their data also shows complaints for crypto crimes are increasing by the year. 

Protecting your crypto coins starts with understanding the basics, like where to buy your crypto and how to store it. 

Unlike traditional currency, cryptocurrency cuts out the middleman. You don’t have a bank watching over your money. It’s up to you to protect it. 

So how do you do this? 

When you buy cryptocurrency on a crypto exchange, your crypto remains on the blockchain. The blockchain is a decentralized database that keeps records of the transactions. You can let the crypto exchange manage your private key or you can do it yourself. 

The private key is a unique secret code that allows only you to manage your currency. It proves ownership. Some experts warn against leaving your crypto on exchanges because these exchanges are connected to the internet and potentially accessible to scammers. 

“Their life savings invested into a platform, and then that money is gone. It disappears,” said attorney Jose Ceide. 

Ceide is a “crypto attorney” with Salazar Law. He represents clients who have lost their crypto digital assets. 

He says your cryptocurrency is best housed in what’s known as a cold wallet.  

“So, you’re basically downloading it, you’re keeping it off the internet. If you want to exchange it, if you want to sell your crypto, you connect it to the internet, you make the transaction, you pull it right back off and like that for a plethora of reasons,” Ceide said. 

A cold wallet is a physical device that stores your crypto keys. It can keep your currency safe from phishing scams, exchange hacks, and give you full control. 

“The value is the crypto itself. So, you have to be very careful with where you place it, where you keep it, where you store it,” Ceide said. 

Your crypto doesn’t have the same protections as your money in the bank. 

If your bank is FDIC insured, that means you’re protected up to $250,000 if the bank fails. But your crypto deposits are not FDIC insured. If something happens, the government may not have an obligation to step in. 

“So, I think as of right now, it’s on us, on the person who’s going to invest to research it, to learn about it, to find out as much as you can about it before you actually start putting dollars behind it,” Ceide said. 

It could also be a good idea to use a separate email address for your crypto transactions. Different from the email account you use for your everyday online shopping and email communication. 

This can cut down on the amount of phishing attempts you receive and gives you a chance to create a more complex password linked to this account. Remember, to enable two-factor authentication.

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