We live in a digital world in which more and more economic transactions are conducted online. As cryptocurrencies become more popular – not just for buying or selling assets, but also for making investments – many people are buying cryptocurrencies online for the first time.
Here we illustrate why you need a VPN when working with cryptocurrencies to avoid becoming a victim of theft.
Besides using it as a traditional currency, you can also use cryptocurrencies for trading. There are numerous markets in different countries worldwide that allow trading in different cryptocurrencies. Unlike stocks, people can trade at any time and in any time zone.
This is partly due to blockchain technology. Blockchain technology keeps cryptocurrencies in a decentralized market and is not regulated by anyone. Unfortunately, this also comes with its own set of risks, especially when it comes to hacking and security. This is where using a VPN can help reduce potential losses and provide more privacy.
Because cryptocurrencies are unregulated, they come with their own set of risks. Hackers take advantage of the fact that these transactions are irreversible and cannot be traced back.
What are some examples of crypto crime?
Fake crypto trading exchanges mislead people by manipulating trading volume and statistics to attract people who are new to crypto trading. It is better to stick to reliable platforms for a volatile market like cryptocurrencies.
Hackers and even state sponsored actors can damage your device and install mining software on the system to extract crypto from your account and transfer all funds to yourself. This is known as cryptojacking, where malware can wipe out almost your entire account.
In recent years, social media has become a popular place for cybercriminals to swindle users out of their cryptos and money.
Cryptocurrency theft is a serious problem
Statistics suggest that cryptojacking cases have increased by 28% in 2020, prompting traders to exercise extreme caution. Hackers create a copy of the currency and use it for transactions while keeping the original. This is known as double spending, a potential risk when trading cryptocurrencies.
In 2021, we have seen cryptocurrency-related hacks and scams grow to nearly $3 billion. Despite attempts to increase security, this number of crimes continues to increase.
On the other hand, there is a growing interest in cryptocurrencies, not only for buying or selling, but also for investing. For this reason, it is a good idea to use a VPN to work with cryptocurrencies and thus be able to work safely.
How Does a VPN Protect Your Crypto?
1. A VPN protects your traffic
A common misconception is that cryptocurrencies offer the user complete anonymity, but that’s not entirely true as hackers and foreign governments can track you via public IP addresses.
You are probably using a private Wi-Fi connection for crypto exchanges that offer almost no security. Hackers can easily track your location and even get your credentials!
Therefore, the VPN for working with cryptocurrencies is a good choice as it protects our data online with encryption and protects our identity. In this case, our data travels as if through a tunnel thanks to encryption that protects us from prying eyes.
Thanks to a VPN we can secure traffic because it masks our public IP address and hides our original location by redirecting traffic to another location that can be hundreds of kilometers away. This makes it almost impossible for anyone to track your online activities.
2. A VPN offers protection against phishing attacks
Phishing is sending fraudulent messages from a trusted source. This is one of the most common ways hackers steal crypto assets. There has been a gradual increase in phishing attacks over the years, around 3% per quarter.
A VPN also offers us protection against phishing attacks. Although this may only happen partially, it blocks certain websites that can potentially harm us. This serves as an extra layer of security for your trading.
3. A VPN hides cryptographic activity from your ISP
Your internet service provider may not know how much bitcoin you bought or sold, but they can determine what trading platform you are using and when you signed up. However, when you use a VPN, your ISP will only see your VPN server’s IP address you use instead of the crypto website. Since the VPN encrypts all data online, the ISP cannot tamper with your connection.
4. A VPN unblocks geo-restricted crypto sites
There are geo-restrictions on crypto trading platforms where users from certain countries may not be able to trade certain altcoins (other cryptocurrencies than bitcoin) on a certain exchange.
This can vary depending on the platform they use for transactions. Since the VPN hides your actual IP address, the trading platform cannot know your geographic location and therefore cannot prevent you from trading on the site.
How to choose a VPN for cryptocurrency operations
Now that we know how a VPN can help us in many ways to protect our data and maintain our privacy, the next step is to choose the right VPN. The market is flooded with VPNs offering different features and prices, so how do you decide? Below we look at some important factors to consider.
1. Choose a VPN with a kill switch
If your VPN connection drops – even for a few seconds – your crypto business details will be exposed, resulting in your location being tracked and identified.
Therefore, a VPN must have the kill switch feature, where if your VPN connection drops, even for a few seconds, it disconnects us from the internet so our data is not compromised.
2. Strict no-logs policy
A VPN can prevent hackers, a foreign government, or other third parties from monitoring your online data, but the VPN provider can still have a record of your online activity. When looking for a VPN, make sure it doesn’t store your data from your online activities; These are VPNs with a zero-logs policy. However, if you find such a VPN, make sure it has the right claims to back it up.
A safe bet would be to rely on a paid VPN service with enough reputation since free providers will sell your information online. In addition, you can find one that allows subscription payment using anonymous payment methods like cryptocurrencies.
3. Look for a VPN with split tunneling
Using a VPN can actually slow down your internet connection, which you don’t want, especially when trading crypto. Split tunneling is a feature that lets some traffic out of the VPN tunnel. This means that you only use VPN to encrypt data in crypto transactions. Since less data needs to be encrypted for the server, the connection is stable and smooth.
4. Check the base country of the VPN
It’s important to keep in mind what country the VPN is from and where it’s operated. Most of the top VPN providers hail from countries without mass surveillance programs, like the British Virgin Islands, Switzerland, and Panama (where NordVPN comes from).
But there’s nothing wrong with being wary of VPNs. Providers from countries with solid surveillance programs, such as the US, Canada, or the UK, can release your data upon request from surveillance authorities. For this reason too, you should not trust a free VPN, even if the idea sounds tempting.
So should you get a VPN?
It’s pretty obvious how important a VPN is, especially for cryptocurrency trading where the security and privacy risks are numerous. To properly hide your IP address, protect yourself from phishing and malware attacks, and have the freedom to operate on platforms in different countries, you need a VPN.
And if you’re having a hard time deciding which one to use, you can try some internationally renowned VPNs like NordVPN, Surfshark, CyberGhost, PureVPN, and HMA VPN. So choose wisely and use a VPN that increases security and protects your data from everyone, including your ISP.
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