5 Reasons Never to Use an Insecure Crypto Exchange

After the price of BTC has surpassed its all-time high at that moment in 2017, a lot of people have paid attention to this concept as a whole. Before that, there were a lot of skeptics who weren’t too confident that invest in cryptocurrencies is something that can provide them with a healthy profit down the road.

In 2019 and 2020, the interest grew even more because the price has managed to reach a whole new level. Sure, 2020 was a pretty strange year. In March, the price was only $3k, which was a result of the global pandemic of coronavirus. However, at the end of 2020 and the beginning of 2021, the price has risen to $40k. Nowadays, we can say that the price has reached $51k, which is an all-time high value.

Of course, the reason is that so many investors have decided to invest a lot of money after the price decline at the end of 2020. Once again, the approach changed a little bit for a lot of investors. Many of them have decided to join different crypto communities where they can have a much easier time navigating through the market.

At the same time, there is a lot of new software introduced to the market. If you would like to take a look at one of the most effective ones, be sure to take a look at btcloopholepro.com/login. To withdraw their money from the market investors, traders use crypto exchanges. However, some of them can be labeled as insecure ones.

While there are many positive effects from them, it needs to be said that those who are not secure enough shouldn’t be used. Now, we would like to provide you with a couple of reasons why you shouldn’t use any insecure crypto exchange. Without further ado, let’s begin.

Source: Vulcan Post

1. They are Easy Targets

One of the commonest myths in the world of cryptocurrencies is that they are safe and sounds while they are in storage. However, we can see that this is not entirely true. Exchange stores and we are talking about those who are not fully protected, can be pretty vulnerable to outside attacks.

In the last couple of years, we can see that many different hackers have managed to hack the system and overtake the cryptos from these exchanges. Every exchange needs to have some kind of security measures that will prevent all the negative effects of these attacks. Sadly, we can see that this is not at an appropriate level in some cases.

Source: DigitalTokens.io

2.They are Not Located Where You Think

Different from many trader’s opinions, we can see that the location is really important. The jurisdictional and physical exchange location is critical. In fact, we can see there’s no global regulation when it comes to exchanging regulations.

So, it shouldn’t come as a surprise that so many investors don’t feel safe enough in investing in these. When we are talking about insecure crypto exchanges, we can see that their true geolocation can be different from what they have presented their users with. Surely, this fact makes it much harder for people to estimate their risks properly.

Source: TradersDNA

3. DEXs are Hackable

One of the things that need to be made clear is that distributed exchanges (DEX) are not providing full security to the traders. It doesn’t really matter if you are using the securest exchange or e-wallet, you cannot expect that the transactions made by DEXs will be secure enough.

There are a lot of weak sides to these transactions. For example, they are easily hackable by XSS and CSRFs. Furthermore, we can see that they don’t have enough protection from takeover attacks, which is a process where credentials are hacked. Last but not least, it needs to be said that there are a lot of vulnerabilities that occur during online transactions.

Source: MyAltcoins

4. Not Understanding the Infrastructure

Now, we would like to address the importance of knowing what’s the infrastructure of the exchange you are using. The whole infrastructure is crucial for making your digital currencies as safer as they can be. As you can presume, cloud and network providers are crucial for deployment, development, and security procedures who are going on. In this case, every little detail is a pretty important one.

Digital currencies are not just magically appearing into the storage and they don’t magically leave it. There are a lot of weaknesses that surround this whole concept. Hackers can actually change the addresses where they will receive money or coins. Not only that, but they can also make a change in the amount sent to a certain address.

Source: Invest In Blockchain

5. Two-factor is not Double Security

Sure, authentication checks can be a pretty good precaution sometimes. However, weaknesses can exist both on the server-side and client-side. When it comes to the client-side, it can be said that the hackers can exploit the XSS issue and change the address in the HTML code to the new one where the money will be transferred to. At the same time, server-side weaknesses can be avoided by any kind of two-factor checks.

When hackers can exploit these weaknesses, they will be able to avoid this authentication and make the transactions by using the client’s identification. As we’ve said, two-factor authentication can be a really good way of protection, but that doesn’t mean you shouldn’t apply other kinds of security.

Source: Merehead

The Bottom Line

All the things that transactions that occur in back-end crypto operations need to go through front-end servers, which is where all the troubles begin. These can be described as some sorts of gateways to all of these potential problems. Therefore, every trader needs to work only through credible exchanges.

Thankfully, we can see that there are so many of them, who can provide you with a proper security system. Surely, hackers will not have any kind of reservation about whether they will attack someone or no. So, traders need to do everything they can to protect their digital currencies. Here, we’ve provided you with a couple of reasons why you shouldn’t use insecure exchanges.

About Margharita Evanom

Avatar

Check Also

5 Best Cryptocurrency Tokens That Are Going to Be Big in 2021

Mining and trading with crypto coins is something that became popular during the last decade, …