Why You Need a VPN for Cryptocurrency Transactions
Cryptocurrencies have become quite popular after the global financial crisis when people lost almost all trust in banks and other financial institutions. This is because cryptocurrencies come with some fascinating benefits.
There’s no middle man in crypto transactions, as they are powered by blockchain technology. A blockchain is a decentralised ledger of digital transactions that stores immutable records (blocks) of data, linking them using cryptography.
Without an intermediary, transactions are much faster (some are almost instantaneous), and transaction fees are lower. This decentralisation, together with cryptography, and the fact that no one can modify the records, also reduces the risk of fraud and increases trust.
Are There Any Security and Privacy Risks?
Unfortunately, there are. Blockchain technology does make crypto transactions safe and secure, but only to a certain level. Cybercriminals still manage to attack the crypto market.
For example, in July 2017, hackers stole $32 million worth of Ethereum, one of the most popular digital currencies.
Experts in the field recommend storing cryptocurrencies in a crypto wallet as it provides an extra layer of security, as opposed to leaving crypto in an exchange account. A crypto wallet stores a private key, known only to its user. To be able to spend money, the user must match their recipient’s public key.
However, hackers can still intercept crypto transactions and gain access to crypto wallets. They can infect devices with malware that records keystrokes and discover usernames and passwords, thus stealing cryptocurrencies.
It’s actually very easy for them to do this. The easiest way to do this is email phishing. A user receives an email from a seemingly legitimate source, which prompts them to click on the provided link. As soon as they click through, malware secretly installs on their device, allowing hackers full access to their accounts, and all their personal and sensitive data.
Why a VPN Is the Best Solution
Ask anyone engaged in the crypto world, and they’ll tell you to use a VPN before you even think of making a transaction. There are several reasons for that. Using a VPN for cryptocurrency transactions enhances blockchain security, can bypass geo-restrictions, and help protect you from cyber attack.
Enhancing Blockchain Privacy
A VPN (Virtual Private Network) uses a tunnelling protocol that encrypts your internet connection. It encrypts data on both ends of the communication, that is, from one end system or device to another. This prevents anyone else from intercepting your data transmission.
This means that a potential hacker cannot access any of your cryptocurrency transactions. They cannot gain access to your system or device, so they can’t try and steal your money, or your sensitive data.
Think of a VPN as a shield that keeps all your data safe and secure. It masks your real IP address, replacing it with an IP address of one of its servers. It hides all your online activity and cryptocurrency transactions, even from your ISP.
This makes you completely invisible online. No one can see what you’re doing online, and whether or not you even make cryptocurrency payments. Cybercriminals can’t target you as easily, because they simply can’t see you online.
All of this is especially important if you use public WiFi to connect to the internet. Public WiFi hotspots don’t enable an encrypted connection, so hackers often take advantage of them.
A VPN will encrypt your public WiFi connection, so you don’t ever have to worry about potential theft or fraud.
Some countries impose geo-blocks to prevent cryptocurrency trade. For instance, China is considering a ban on Bitcoin mining at the moment.
Geo-blocking can be a problem if you want to pay for a product or service using a particular cryptocurrency in a country that doesn’t allow it. With a VPN, you can solve this problem.
A VPN will connect you to a remote server that virtually puts you in a different geographical location. This is simply because it will assign you a different IP address. By selecting an IP that places you in a location without geo-restrictions for preventing crypto trade, you effectively bypass geo-blocks.
Keep in mind that some websites use software for VPN detection to prevent people from going around geo-restrictions. However, regularly alternating between different IP addresses can help you avoid VPN detection.
VPNs come with plenty more benefits, but these are the most vital when it comes to cryptocurrency payments. Therefore, find the best VPN you can find for your needs in New Zealand and install it as soon as you can.
With the best VPN service in place, you will be able to safely and securely make your cryptocurrency transactions. You’ll minimise the risk of potential cybersecurity incidents and keep all your personal data private.
Disclaimer: The above references an opinion and is for informational purposes only. Do not take this as personalised financial or investment advice. The opinions expressed by the author do not represent the opinion of BitPrime.
Images courtesy of Shutterstock and Nord VPN unless stated otherwise.
Last updated: 23/05/2019