Many Nigerians are beginning to think outside of the proverbial box in terms of investment opportunities. While blue-chip stocks, commodities and Forex pairs are indeed popular, a growing number have turned to the cryptocurrency marketplace due to its liquid nature as well as the ability to accrue profits within an amenable time frame.
While there are indeed plenty of opportunities, it's just as important to remember that online security is just as important. The good news is that cryptocurrencies offer a level of privacy that is hardly possible when compared to other asset classes. However, there are additional steps to take as well as some risks to understand. Let us first take a look at why trading cryptocurrencies can provide a somewhat anonymous edge before clarifying a few practical tips and suggestions.
Behind Closed Doors: How Cryptocurrencies Function
One of the core principles of crypto trading can be traced back to the architecture of the entire network. There is no type of central bank, server or all-seeing administrator. In other words, personal details (such as your name or a bank account number) will not be stored in a ledger that can potentially be accessed by a third party. However, the phrase "anonymous" is a bit of a misnomer.Major cryptocurrencies such as Bitcoin and Ethereum are not technically anonymous in nature. They are instead what experts refer to as "pseudonymous". As opposed to completely hiding the identity of a trader, they instead generate a fake one that is used when performing transactions. This is commonly how crypto wallets function. Although a powerful measure, it is not foolproof in and of itself. Smart algorithms might very well be able to unearth digital details and this is a particular concern for institutional traders who might invest significant amounts of money at any given time.
Now that we have cleared the air in regard to anonymous versus pseudonymous, we can move on to discuss other ways that Nigerians can keep their identities and financial information behind closed digital doors.
The Use of a Virtual Private Server
Often abbreviated as VPS, the use of a hosted virtual private server is another way to enjoy higher levels of security. These virtual machines are operated by a cloud-based hosting service that splits servers into a series of private "nodes". Note that this is different from shared hosting services in which a group of individual users share the same resources. As each client is allotted a dedicated amount of space within a virtual private server, the chances of a data breach are much less likely. Here are some other benefits that can be enjoyed:- Higher storage capacity
- Scalability (resources can be added or removed when needed)
- Dedicated oversight by a team of professionals
- The ability to detect and thwart threats such as spyware, malware and phishing
- Additional security software can be installed if required
Antivirus Programs
Believe it or not, the majority of cyberattacks can still be thwarted with the help of professional-grade antivirus programs. These systems act as firewalls; providing yet an additional layer of protection from unauthorised third parties. While many of these packages are free, it is normally best to opt for a paid subscription. You will be provided with more protection and the systems themselves can often be configured to suit your personal requirements. The good news is that there are plenty of options to choose from.
A Dose of Common Sense
Finally, always be sure to use trusted cryptocurrency trading platforms as well as reputable e-wallets. When in doubt, it is always better to leverage the expertise of a company that boasts a solid track record and employs cutting-edge protocols such as SSL encryption. This is also an excellent way for institutional traders to proactively manage their portfolios with the help of a dedicated account manager. In the rare event that suspicious activity is detected, it can be quickly dealt with before causing negative consequences.
There is little doubt that even more Nigerians will be entering into the cryptocurrency community in the coming years. This is why the role of security is even more important. All of the strategies outlined above are easy to implement and with even a moderate level of foresight, your personal information can remain secure at all times.
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