The adoption of DeFi has grown as new crypto projects are coming out every day and many investors are buying crypto for the first time. But while investors see this as an opportunity to invest, so do scammers, who see these new investors as easy prey. Today we will be considering some of the Safest Cryptocurrencies to invest in.
Therefore, knowing the safest cryptocurrencies to invest in is certainly high on the priority list, and thus it’s very essential for users to practice the law of investing, which says: “Investigate before you invest.”
Do ride along!
Crypto Safety Tips
Use a Crypto Safety Deposit box
There is nothing more secure than a digital safe deposit box for safe crypto storage of digital assets and tokens. It employs multiple layers of security to protect owners’ assets, rendering it nearly impenetrable and impossible for hackers to complete a transaction and steal the contents of the box.
Using the blockchain’s power, once the safe deposit box is created and items are transferred into it, a hacker will find it extremely difficult to break in and take what’s stored there.
With MPC technology, the cryptocurrency storage box is only accessible when all of the devices used to create it attempt to access it at the same time. Because the keys are spread across these devices, getting inside is impossible unless you are the owner.
Use a Cold Storage Crypto Wallet
If you’re a trader or investor with sizable crypto holdings in exchanges, instead of storing your cryptos on an exchange hot wallet, it’s better and safer to move them to a cold storage Wallet like a hardware wallet.
You can check out this great article on Crypto Cold Storage Explained.
Because a hardware wallet has no Internet connection, an attacker would find it extremely difficult to infect it with malware, making it one of the best ways to protect your cryptocurrency. It’s a USB flash drive that stores your 12 keys. It is built in such a way that your seed words cannot be moved out of the device unencrypted.
Each time you conduct a transaction with a hardware wallet, you must connect it via USB to your PC or mobile device. A signature is generated by the wallet and sent to your internet-connected device, allowing you to conduct transactions without exposing your key to a potentially malware-infected device.
Hardware wallets also have PIN codes, so the attacker would still have a hard time getting your crypto if your wallet is physically stolen.
Look out for Phishing sites
Scammers are increasingly creating fake websites that look exactly like legitimate ones but have slightly different spellings in their URLs. The site may lead to different smart contracts from legitimate ones, and these smart contracts may be malicious.
An attacker can use this method to steal your crypto. Let’s say you have an issue you’re trying to resolve. This is where they DM you as a customer service agent and try to convince you by luring you to interact with their fake sites, claiming it will help get your issue resolved.
It might also be interacting with a fake wallet or using a fake application that’ll request your keyphrase. Many scammers, for example, will offer fake versions of the popular Ethereum wallet, MetaMask. They’ll even advertise these fake wallets online.
The best way to avoid this type of scam is to only download a wallet from the project’s official website, which means avoiding click-through advertisements on search engines or social media sites. You may also want to avoid using searches in Google Play or the iOS App Store to find wallets.
Why is Crypto Safe?
Cryptocurrencies are digital or virtual currencies that rely on cryptographic systems to function. They make it possible to make secure online payments without the use of third-party intermediaries. Despite the fact that they are simply applications built on blockchain technology, their safety is dependent on the technology, which has been shown to achieve decentralized security and trust in a variety of ways.
Using blockchain technology, new blocks are added to the “end” of the chain. It is extremely difficult to go back and change the contents of a block after it has been added to the end of the blockchain unless a majority of the network has reached a consensus to do so.
These blocks in the chain are an array of cryptocurrency transactions. Each block contains the hash of the preceding, as well as the previously mentioned timestamp. Hash codes are created by a mathematical function that turns digital information into a string of numbers and letters.
If that information is changed in any way, the hash code will change as well. Assume a hacker operates a node on a blockchain network with the intention of altering the blockchain and stealing cryptocurrency from everyone else. If they changed their single copy, it would no longer be in sync with everyone else’s copy.
When everyone else compares their copies, they will notice that this one copy stands out, and the hacker’s version of the chain will be dismissed as illegitimate. To succeed, the hacker will control and alter 51% of the blockchain copies at the same time, so that their new copy becomes the majority copy and, thus, the agreed-upon chain.
Such an attack would also necessitate an enormous amount of money and resources, as they would have to redo all of the blocks due to the different timestamps and hash codes. Because of the size and speed with which many cryptocurrency networks are growing, the cost of accomplishing such a feat would almost certainly be insurmountable.
This would not only be extremely expensive but also likely futile. Such an action would not go unnoticed by network members, who would notice such drastic changes to the blockchain. Members of the network would then hard fork off to a new version of the chain that was not affected.
This would cause the value of the attacked version of the token to fall, rendering the attack ultimately pointless because the bad actor now controls a worthless cryptocurrency. The same thing would happen if a bad actor attacked the cryptocurrency’s new fork. It is designed in this manner so that participating in the network is far more economically advantageous than attacking it.
Safest Cryptocurrencies to invest in
Due to the high influx of crypto projects coming out every day, sorting out the safest cryptocurrencies to invest in is highly essential as investing in cryptocurrency projects without conducting deep research becomes a gamble, i.e., you have no idea if the project will turn out well. Is there anything like “Safest cryptocurrencies”? Perhaps, perhaps not.
The safety of a cryptocurrency is solely dependent on the team behind the project and the designs/measures in place to protect the safety of the network. Below are some highlights of some of the safest cryptocurrency to invest in 2022:
Market cap: $340.1 billion
Bitcoin (BTC) was the first cryptocurrency created in 2009 by Satoshi Nakamoto. As with most cryptocurrencies, BTC runs on a blockchain, or a ledger logging transactions distributed across a network of thousands of computers called nodes.
Because additions to the distributed ledgers must be verified by solving a cryptographic puzzle, a process called “proof of work,” Bitcoin is kept secure and safe from fraudsters.
Bitcoin’s price has skyrocketed since its inception and is also responsible for bringing a lot of users into the cryptocurrency ecosystem. In the early years of its inception, you could buy Bitcoin for a few dollars. As of December 15th, 2022, a single bitcoin’s price according to coinmarketcap was around $17,682.35.
Market cap: $157.5 billion
Ethereum was conceived in 2013 by programmer Vitalik Buterin. It’s both a cryptocurrency and a blockchain platform. The Ethereum blockchain is one of the most-used chains in the world, supporting a rich landscape of non-fungible tokens, games, smart contracts, and DeFi lending abilities. In contrast to Bitcoin, the Ethereum network now uses a proof-of-stake, or PoS, protocol following the Ethereum “Merge” in September.
This is a net positive, especially for environmentally focused investors, as PoS is far more energy efficient than Bitcoin’s proof-of-work protocol. Ethereum has also experienced tremendous growth since its inception. As of Dec 15th, 2022, a single Ethereum price according to coinmarketcap was around $1,287.25.
Market cap: $65.9 billion
Tether was launched by the company Tether Limited Inc. in 2014. Unlike some other forms of cryptocurrency, Tether (USDT) is a stablecoin, meaning it’s backed by fiat currencies like U.S. dollars and the Euro and hypothetically keeps a value equal to one of those denominations.
Investing In a stable coin eliminates the risk of volatility that other unstable cryptocurrencies face, and it’s favored by investors who are wary of the extreme volatility of other coins.
U.S. Dollar Coin (USDC)
Market cap: $45.1 billion
US Dollar Coin (USDC) is another stablecoin (like USDT), a type of token that is backed by real-world assets and achieves a 1:1 USD to USDC ratio. It was created in a joint venture by the fintech company Circle and crypto exchange Coinbase. Ethereum powers USDC, and you can be used to complete global transactions.
Binance Coin (BNB)
Market cap: $42.4 billion
Changpeng “CZ” Zhao is the founder of Binance coin and CEO of crypto exchange Binance. Binance Coin (BNB) is a form of cryptocurrency that you can use to trade and pay fees on Binance. Since its launch in 2017, Binance Coin has expanded past merely facilitating trades on Binance’s exchange platform.
Now, it can be used for trading, payment processing, or even booking travel arrangements. It can also be traded or exchanged for other forms of cryptocurrency, such as Ethereum or Bitcoin. As of 15th Dec 2022, a single BNB price according to coinmarketcap was around $264.52.
Are Cryptocurrencies safe to invest in?
Due to several ongoing hacks/scams in the cryptocurrency space, it’s only normal for one to try to find out some of the safest cryptocurrencies to invest in. Cryptocurrencies have earned a reputation as risky investments. While the underlying cryptography is generally secure, the technical complexity of using and storing crypto assets can pose a significant risk to new users.
In addition to the risks associated with speculative assets in the market, cryptocurrency investors should be aware of the following risks:
User risk: Unlike traditional finance, a cryptocurrency transaction cannot be stopped or reversed once it has been sent. According to some estimations, a fifth of all bitcoins is currently inaccessible because of forgotten passwords or invalid sending addresses.
Management risks: There are few safeguards against dishonest or unethical management practices, such as the fallout from the largest derivatives exchange FTX, due to the absence of consistent regulations and transparency. Many investors and merchants rely on exchanges or other custodians to store their cryptocurrency. One could lose their entire investment if one of these third parties was to commit theft or suffer a loss.
Risks associated with smart contracts: To regulate the flow of user deposits, many lending and investment platforms use automated smart contracts. An investor using one of these platforms should be aware that their investment could be lost due to a smart contract exploit.
Market Manipulation: In the cryptocurrency ecosystem, market manipulation is still a major issue, and some exchanges have been accused or known to manipulate prices or trade against their users. Despite the asset’s speculative nature, some investors have made significant fortunes by taking on the risk of investing in early-stage cryptocurrencies.
Safest Cryptocurrencies to invest IN: BOTTOm line
Due to the wide adoption of cryptocurrencies, investing in cryptocurrencies as a newbie can leave you vulnerable to the latest ongoing scams in the crypto ecosystem. Despite these risks, cryptocurrencies have seen a major leap in prices, with the total market capitalization rising to over $1 trillion.
Being that this is a relatively new technology, it is important to understand the risks involved before making an investment. As a result, do well to become familiar with the crypto safety tips discussed above as well as some of the safest cryptocurrencies to invest in.