Introduction Storing, handling, and transferring money have always been risky since its invention. Trust issues hampered keeping money with others, and keepingIntroduction Storing, handling, and transferring money have always been risky since its invention. Trust issues hampered keeping money with others, and keeping

How to Be Secure in the Insecure Crypto Market

2026/02/14 03:25
6 min read
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Introduction

Storing, handling, and transferring money have always been risky since its invention. Trust issues hampered keeping money with others, and keeping cash at home is like inviting burglars. Banks are not as modern as they generally seem. The idea as old as human civilization. Temples offered storage of grains in ancient Mesopotamia as early as 2000 BCE. The crypto market and decentralized finance made their debut in 2009, so the field is relatively new. Since all transactions are placed online, risks are amplified. Therefore, for a general user, it is essential to know about the general security principles regarding the crypto market so that they do not lose their money to hackers and scammers.

Why Privacy Matters

Many crypto scams, such as a dusting attack, are random on many users to trap the suitable victim. However, many attacks, like the eclipse attack and address poisoning attack, target specific users. The key is to maintain as much privacy in the crypto market as possible. You must avoid sharing your address on any public platform and boasting about your crypto holdings.  When you brag about your successful traders, it is just like showing off your stored wealth and inviting robbers. This is because the internet takes information across the globe in the blink of an eye. It is true that no one can extract private keys from the public key, yet you can fall prey to address poisoning attacks and eclipse attacks.

Protecting Yourself Is Your Own Responsibility

Where decentralization brings benefits, it also causes problems hitherto unobserved and unexperienced. For instance, you can appeal against any scam or unauthorized access to your bank account, and the banks usually cooperate with you and compensate your loss. This is not the case in decentralized finance (DeFi), where you cannot undo a transaction at all once you have confirmed it, so double-check the address of the recipient before sending any digital asset.

You must make it your habit to use two-factor authentication (2FA) and passwords as strong as possible. After setting up your account with these two security principles, beware of phishing attacks that involve attackers creating and employing fake websites and emails to lure users into sharing their private information. Such sites and email addresses look like the ones used by the exchanges where you keep your assets. The scammers might frighten you to log in lest your funds be endangered, or tempt you to claim a prize. First of all, never log in by using a link. If you feel you have to, make sure the email is from a legitimate sender by checking the complete email address of the sender.

How to Be Your Own Bank

By being your own bank, it is implied that you must hold the crucial details of your crypto wallet somewhere where no one can access them. Keeping your money on exchanges or custodial wallets is like entrusting your money to an institution, which may do its job well or just walk away with your money. In the past, exchanges have defaulted due to many reasons.

There has been no major exchange-related scandal after the FTX crash in late 2022, yet it is wise to keep your money on the exchanges only when you intend to trade actively. Exchanges themselves may not turn malicious, but they are always vulnerable to hackers. Cyber attacks may deprive you of your hard-earned money just because you chose not to shift your assets off the exchange.

The best storage place for your crypto is undoubtedly the cold wallets. These wallets are online only when you need them to be. Otherwise, they are offline and invisible to scammers. They are better than non-custodial wallets, which are always online.

Paper wallets, which hold your private keys written on a piece of paper (or engraved on a plate of metal), are also regarded as a very safe way to store private keys. They are, however, quite difficult to manage and usually only viable for one-time use.

Smart Contract and Token Approval

When you trade on decentralized exchanges or DeFi applications, you interact with the smart contracts that need your permission or approval to access the funds in your wallet. There is a common misunderstanding that once the trading session is over and the wallet is disconnected from the application or the exchange, no risk remains. In reality, your approval remains active until you revoke it manually. There are many reported cases where attackers accessed the wallets after months of the initial approval, just because the approval had not been revoked. Even the most trusted protocols may become compromised later on, and all approvals may be exploited,

Device and Software Security

Blockchains are secure enough to deter bad actors, who mostly target users’ devices to steal assets. Attackers fire malicious software, spyware, and browser extensions into many devices. When users access their wallets, the malware becomes active in many ways. It can alter the copied wallet addresses, monitor keystrokes, and control transactions secretly. These tactics can tackle even the safest wallets because the attack is executed exactly when the decision is to be made.

The way to be safe from such attacks is to pay close attention to the extensions you install on your browsers, double check the copied address before confirming the transactions, and install applications only from trusted developers.

Wallet Segmentation and Risk Isolation

Managing multiple wallets according to purpose represents an advanced yet highly practical security strategy. Instead of using a single address for every activity, users can divide funds into separate wallets designated for long-term holding, active trading, and experimental interaction with new platforms. This separation ensures that exposure in one area does not threaten the entire portfolio. A compromised trading wallet may result in limited losses while long-term assets remain untouched in a separate environment.

Segmentation also promotes disciplined financial behavior by encouraging deliberate transfers between wallets rather than impulsive spending from a single pool of funds. Each wallet becomes a layer of protection that reflects different levels of risk tolerance and operational activity. Over time, this layered structure transforms security from a single defensive barrier into a resilient system of controlled exposure. By isolating risks and maintaining clear boundaries between different types of activity, users create a financial structure that mirrors professional risk management practices and significantly reduces the impact of unforeseen threats.

Conclusion

In an environment where digital assets move instantly and mistakes are irreversible, security in the crypto market depends largely on personal awareness and discipline. By prioritizing privacy, safeguarding private keys, using secure storage methods, monitoring smart contract approvals, and maintaining strong device hygiene, users can significantly reduce their exposure to risks. Practices such as wallet segmentation and cautious online behavior further strengthen this defensive framework. Ultimately, while no system is entirely risk-free, informed decision-making and consistent security habits empower individuals to navigate the crypto ecosystem with greater confidence, resilience, and long-term stability.

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