We live in a digital world where more and more economic transactions are carried out online. As cryptocurrencies gain popularity—not only to buy or sell assets but also to make investments—many people are buying cryptocurrency online for the first time.
Here, we will illustrate why you need a VPN if you work with cryptocurrencies so that you do not become a victim of theft.
Apart from being used as traditional currency, you can also use cryptocurrencies for trading. There are numerous markets located in different countries worldwide that allow trading in various cryptocurrencies. Unlike stocks, people can trade at any time and time zone.
This is in part due to blockchain technology. Blockchain technology keeps cryptocurrencies in a decentralized market and unregulated by anyone. Unfortunately, this also comes with its own set of risks, particularly related to hacking and security. This is where using a VPN can help reduce potential losses and provide more privacy.
Since 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.
What Are Some Examples of Crypto Crimes?
Fake crypto trading exchanges mislead people by manipulating trading volume and statistics to bring in people who are still new to crypto trading. It is better to stick with reliable platforms for a volatile market like cryptocurrencies.
Hackers, and even state-sponsored actors, can corrupt your device and install mining software on the system to extract crypto from your account and transfer all funds to themselves. This is known as cryptojacking, in which malware can wipe out almost your entire account.
In recent years, social media has become a popular place for cybercriminals to scam users of their crypto and money.
The Theft of Cryptocurrencies Is a Severe Problem
Statistics suggest that in 2020, cryptojacking cases increased by 28%, prompting merchants to exercise extreme caution. Hackers make a copy of the currency and use it for transactions while keeping the original. This is known as double-spending, a potential risk in cryptocurrency trading.
In 2021, we saw how hacks and fraud cases related to cryptocurrencies have increased to almost $3 billion. Even though attempts are being made to reinforce security, this number of crimes continues to grow.
On the other hand, there is a growing interest in cryptocurrencies, not only for buying or selling but also for investments. For this reason, it’s a good idea to use a VPN to work with cryptocurrencies and thus be able to operate safely.
How Does a VPN Protect Your Crypto?
1. A VPN Protects Your Traffic
A common misconception is that cryptocurrencies provide complete anonymity to the user, but that is not entirely true because hackers and foreign governments can track you through public IP addresses.
You are likely using a private Wi-Fi connection for crypto exchanges that offer almost no security. Hackers can easily track your location and even get your login credentials!
Therefore, the VPN for working with cryptocurrencies is a good choice because it protects our data online through encryption and protects our identity. In this case, it is as if our data travels through a tunnel thanks to encryption which protects us from prying eyes.
Thanks to a VPN, we will be able to secure the traffic since it masks our public IP address and hides our original location by redirecting the traffic to another place that could be hundreds of miles away. This makes it almost impossible for anyone to keep track of your online activities.
2. A VPN Offers Protection Against Phishing Attacks
Phishing is the sending of fraudulent messages from a trusted source. It is one of the most common ways hackers steal crypto assets. Over the years, there has been a gradual increase in phishing attacks, about 3% each quarter.
A VPN will also offer us protection against phishing attacks. Although it may only do so partially, it will block certain web pages that can potentially harm us. This acts as an additional layer of security for your trade.
3. A VPN Will Hide Cryptographic Activities From Your ISP
Your internet service provider may not know how much bitcoin you bought or sold, but they can tell what trading platform you use and when you logged in. But if you use a VPN, your ISP will only see the IP address of the VPN server you use instead of the crypto website. Since the VPN encrypts all data online, the ISP cannot manipulate your connection.
4. A VPN Will Unblock Geo-Restricted Crypto Sites
There are geographical restrictions on crypto trading platforms where users from certain countries may not be able to trade certain altcoins (cryptocurrencies other than bitcoin) on a particular exchange.
This may vary depending on the platform they use to transact. As the VPN hides your actual IP address, the trading platform cannot know your geographical location and, therefore, will not be able to 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 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’ll look at some important factors to consider.
1. Choose a VPN With a Kill Switch
If your VPN connection goes down—even just for a few seconds—your crypto business data will be exposed, leading to your location being tracked and identified.
Therefore, a VPN must have the kill switch feature, in which if your VPN connection drops even for a few seconds, it will disconnect us from the Internet so that our data is not compromised.
2. Strict No-Logs Policy
A VPN can prevent hackers, a foreign government, or any other third party from monitoring your online data, but the VPN provider may still have records of your online activities. When looking for a VPN, ensure it does not save your data from your online activity; these are VPNs with a zero logs policy. However, if you find such a VPN, make sure it has proper claims to prove it.
A safe bet would be to rely on a paid VPN service with enough reputation, as free ones sell your information online. Additionally, you can find one that allows subscription payment using anonymous payment methods such as cryptocurrencies.
3. Look for a VPN With Split Tunneling
Using a VPN can indeed 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 use VPN only to encrypt data while doing crypto transactions. Since there will be fewer data to encrypt for the server, the connection will be stable and smooth.
4. Check the VPN’s Base Country
It is vital to keep in mind the country the VPN originated from and where it operates. Most of the top VPN providers come from countries without any mass surveillance programs, like the British Virgin Islands, Switzerland, and Panama (where NordVPN comes from).
But it is not wrong to be wary of VPNs. Providers from countries with solid surveillance programs like the US, Canada, or the UK can hand over your data if requested by surveillance agencies. This is also why you should not trust a free VPN, even if the idea sounds tempting.
So, Should You Get a VPN?
It is pretty obvious how important a VPN is, especially for cryptocurrency trading, where the security and privacy risks are many. To properly hide your IP address, protect yourself against phishing and malware attacks, and have the freedom to operate on platforms in different countries, you need a VPN.
And if you are having a hard time picking one, you can try some internationally renowned VPNs like NordVPN, Surfshark, CyberGhost, PureVPN, and HMA VPN. So, choose wisely and use a VPN that enhances security and protects your data from anyone, including your ISP.
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