October is National Cybersecurity Awareness Month and peer-to-peer (P2P) bitcoin marketplace and digital wallet provider, Paxful, is shining the spotlight on the escalating need for security awareness amongst users when trading in digital currency.
As criminals become increasingly technically proficient, the benefits of cryptocurrencies are also being exploited, and virtual currency-related crime is on the rise in South Africa.
Hackers are using peoples’ phones to mine cryptocurrencies according to cybersecurity experts, and various South African authorities including the South African Reserve Bank (SARB) have started the process for reviewing the impact of the crypto sector on consumers and the impact on personal financial security.
With 3-million wallets globally, and South Africa being one of its top markets, Paxful processes over 50 000 trades a day.
The fluctuating price of the world’s most prominent digital currency has not deterred South Africans either as Paxful has noticed a massive 2 800% increase in trades from South Africa this month compared to October 2018. Overall, Paxful has also noted that the number of trades across the African continent has grown by 64% when comparing the same time period.
While the majority of cryptocurrency trades are safe, in recent years, the sector has not proved completely immune to scams and fraudulent transactions. With the cryptocurrency industry still fairly new, scammers prey on users who lack the appropriate awareness in this space.
“Bitcoin is secure but sometimes the way we use it is unsafe,” says Ray Youssef, co-founder and CEO of Paxful. “We have to treat bitcoin like cash and protect our personal information and passwords the same way we do when we use an ATM or shop online. Once your bitcoin is in the hands of hackers and scammers, it is irreversible, so to have the necessary safeguards in place is critical.”
Youssef adds: “For more and more people all over the world, P2P finance is their only hope for financial inclusion and empowerment. While it’s not possible to completely eliminate the risk of crypto fraud and theft, by taking a few simple precautions you can substantially reduce your chances of becoming a victim by following Paxful’s top tips for safe trading.”
These tips are:
* Protect your identity – Personal information can be used to impersonate your identity online – PIN’s, phone numbers, email addresses, passwords, etc. Always keep this information safe. Two Factor Authentication (2FA) adds another layer of protection. After entering passwords or transaction details, the system sends a verification code to your trusted device (such as your mobile phone) to ensure that you are aware of key activity on your account.
* Use an escrow service – You may not know everybody personally that you engage with when trading. For this reason, when you transact on a bitcoin marketplace, an escrow service holds your bitcoin until the buyer/seller terms have been met.
* Watch out for bitcoin scams – “Bitcoin scam” is a broad umbrella term for all kinds of scams that take place in the crypto space. They include fake bitcoin exchanges, bitcoin investment scams and blackmail emails.