The cryptocurrency market has become very popular over the past few years. People all around the world are showing increasing interest in the crypto industry, but how safe is the market?
With so many options for crypto exchanges and trading assets, there are many things that traders are focused on. But one thing more important than anything else is the safety and security of you and your funds.
Crypto exchanges around the world are adopting different types of policies and algorithms, aimed at ensuring the highest safety standards of their clients.
Many of the traders are using automated trading robots when investing in the cryptocurrency market. While very popular, there also are some concerns about the safety of automated crypto trading.
A crypto trading bot is a program that is capable of analyzing the market as well as opening and closing orders for you. Trading bots are very useful and effective in the crypto trading market. They can analyze huge amounts of data, such as crypto trading charts, and provide traders with accurate and timely information about the market conditions.
Trading robots are also able to oversee the market 24 hours a day, 7 days a week, making sure that the best trading opportunities are found for your positions.
On the other hand, analyzing the market on your own could take you several hours. Also, there are always some types of limitations when it comes to the amount of data humans can analyze on their own, while there are no such limitations for crypto trading robots.
To make sure the highest safety and security standards are met, the majority of the crypto trading robots are using API keys as a way to connect with the accounts of traders at crypto exchanges. This way, the connection is highly secure.
In addition, to make sure everything goes smoothly and without any problems, traders have the opportunity to limit the access of the trading robot to their accounts. For example, you can disable withdrawals when using a crypto trading robot, which can guarantee that there are no funds withdrawn from your account.
Crypto Token Networks – What Are They?
While there are many important things that should be remembered by traders when it comes to the safety and security of their trading activities, one thing that is of utmost importance is choosing the correct crypto token network.
Around 95 percent of all assets trading on the crypto exchanges today are digital tokens that are hosted on different blockchains in the market. There are numerous networks available in the market and different crypto assets have different networks. Because of this, it is a very frequent development in the crypto trading market for traders to not know which network to use.
There are numerous networks in the market. For example, OMNI is one of the best-known networks, which is an add-on protocol that allows users to create their own tokens on the Bitcoin blockchain.
The network uses BTC as a native token, however, it is not very actively used because it is mostly associated with very high fees and low transaction speed. The most popular environment for digital tokens today is the ERC20, which is the Ethereum blockchain protocol.
The native token of this protocol is Ethereum. There also are many others available in the market, such as TRC20, utilizing TRX as a native token, BEP2, protocol of Binance, suing NBN as a native token, and so on.
Why Do They Matter?
As we have already said, because there are so many networks in the market, even some of the most experienced traders in the market might find it hard to remember which network to use for which crypto.
Whenever you are withdrawing assets from a centralized exchange to an external address, you might face a very unpleasant mistake that can be devastating for you – choosing the wrong network.
The more tokens are available on the exchange that you are using, the higher chances for you to make a mistake. After you choose which crypto you want to withdraw, you are required to choose the network. This is the moment when many people make mistakes.
The reason behind this is that there are all different types of information provided to you on this page, including the conditions of the withdrawal. In most cases, beginners choose the network with the lowest fees, which can end up with dramatic consequences and the loss of your assets.
To prevent crypto users from such unpleasant situations, the majority of the crypto exchanges today automatically check withdrawal addresses to make sure that clients do not use the wrong networks.
But, this is not the only mistake that can be made while withdrawing cryptos. Every time you make withdrawals from the exchange, there are several things that you should be concerned about.
First of all, as we talked about above, you should always choose the correct network. After you are sure that you are using the correct network, make sure that you do not forget about MEMO. In addition to the wallet address, some of the networks also require additional information, such as MEMO for example.
Also, always make sure that you are sending the right coin. Because some of the networks have similar addresses, traders happen to mistake the coins in some cases. A very common mistake happens between Bitcoin Cash and Bitcoin transactions.
Also, never ignore the fees, and keep in mind that in most cases, commissions are deducted from the transfer amount and not separately.
At the end of the day, there are many mistakes that can be made during crypto withdrawals. The more you know about the nature of these mistakes, the safer you can be.
Working as a cyber security solutions architect, Alisa focuses on application and network security. Before joining us she held a cyber security researcher positions within a variety of cyber security start-ups. She also experience in different industry domains like finance, healthcare and consumer products.