Crypto Scams Are Costing People Millions. Here's How to Invest Safely.
How safe is your digital wallet?
Cryptocurrencies are incredibly safe data storage systems. They keep a detailed ledger of transactions wide open to the public, but only for reading. Inserting new transactions requires some heavy-duty computing, and high-quality encryption ensures that nobody can change existing records.
Unfortunately, these ultra-safe cryptocurrencies are tied to imperfect trading systems. Despite their best security efforts, every crypto exchange is vulnerable to painful combinations of clever hacking and human error. Just last week, for example, the popular Bybit exchange lost $1.4 billion of Ethereum (CRYPTO: ETH) to a well-known North Korean hacker group. The hackers used some sophisticated technical know-how, but the hack was ultimately only possible because the attackers tricked several human transaction managers into signing a bad digital contract.
Just like with the internet and social networks, you have to be careful with cryptocurrency investing. According to a recent Motley Fool research report, Americans lost $3.9 billion to investment scams in the first three quarters of last year, and one-third of the scams involved cryptocurrencies. And I know the feeling after a moment of weakness nearly erased my crypto holdings in 2023.
