As we’ve covered multiple times on this blog, hackers have managed to steal over $1 billion worth of cryptocurrency in the last few years. The risk is as real today as it has ever been, but there are unfortunately a lot of misconceptions about how this happens. Some people incorrectly conclude that it is because blockchain tech is inherently risky and full of security holes. In today’s article, we’re going to set the record straight about the safety of blockchain and cryptocurrencies and explain exactly how you can reduce your risk of getting your coins stolen to near-zero.
Most cryptocurrency exchanges are “centralized”, meaning they are controlled by one company, and take custody of user funds by providing wallets to customers. For this reason, they can also be called “custodial” exchanges.
In order for the exchange to function properly, it has to be able to fulfill orders quickly. To do this, funds need to be liquid and readily accessible, which means they need to be kept in a “hot” wallet- one that is connected to the internet at all times.
But what most people don’t really understand is that their funds are actually subdivided up in exchange “hot wallets”, meaning giant wallets for each supported cryptocurrency that hold hundreds of millions- sometimes BILLIONS of dollars worth of funds in them. If you somehow got ahold of the private key of one of these wallets, you could take all that money for yourself.
These private keys controlled by exchanges are the vulnerability that hackers go after. The hackers penetrate the external security measures of the exchange and begin rummaging through their internal files. Sooner or later, they will find information for the private keys, and help themselves to the funds in those wallets.
To be clear: when BTC gets stolen, it is because the private keys for the WALLET were exposed, not due to some deficiency in the BTC blockchain itself. The same is true for any other cryptocurrency.
Ethereum co-founder Gavin Wood could not have put it better when he said that arguing otherwise is like saying “the internet is broken” every time an individual website goes down.
It’s actually pretty simple to protect yourself from crypto hackers: only store your funds in wallets which YOU control- meaning that only YOU have access to the private keys.
This can be a software wallet like MetaMask or MyEtherWallet, a desktop wallet like Exodus, or a hardware wallet like a Trezor Model T or Ledger Nano X. It really doesn’t matter, just as long as you’re the only one who has the private keys and recovery phrases for your wallets. Store this information on paper in a safe place, and your chances of losing your crypto drop to near-zero.
But what about when you want to exchange the cryptocurrency you have for other assets?
That’s where Faa.st comes in. With Faa.st, you can connect your safe, secure hardware or software wallet directly to Faa.st and begin swapping 70+ different cryptocurrencies without ever having to send them to centralized exchange. Since Faa.st is a non-custodial product, we never take control of your funds. Even if WE go hacked, the hackers would not be able to take your money, because we don’t have it in the first place.
Faa.st simply acts as a market maker- connecting buyers and sellers in the simplest, most frictionless way possible.
It really doesn’t get any safer than that.
Try out Faa.st today and see what thousands of satisfied customers already know: the future of crypto trading is non-custodial, and it starts with Faa.st.