Should I Use a VPN for Cryptocurrency Trading?
News | September 12, 2022, 8:00 PM | The content is supplied by a Guest author
Cryptocurrencies are intrinsically anonymous and have their own encryptions for security. This is why many traders do not see the need to use a VPN when trading crypto. However, anonymity and security are becoming major problems in the crypto space. As such, there are many benefits of using a VPN when trading cryptocurrencies. In this review, we will look at the reasons why you should use a VPN when trading crypto.
According to the Chainalysis Mid-Year Crypto Crime report, hackers stole over $1.9 Billion by July 2022. This is up from 2021’s $1.2 Billion. Too many people are losing their crypto funds to hackers. This is one of the main reasons for VPN crypto trading. A powerful VPN will add a layer of security to your trading. It will protect you from phishing, malware and virus attacks.
Image source: Chainalysis.com
Powerful VPNs will have a block list that will prevent you from landing on known phishing sites. They also add a layer of protection against the installation of malware and viruses. However, note that VPNs are not perfectly secure by themselves. For example, VPNs may not protect you from private phishing messages and emails. So make sure you stay vigilant to protect yourself.
VPNs also help improve your crypto trading security through encryption. They create a virtual tunnel between your computer and the trading website’s server. This tunnel ensures any data transferred between the two stays private and secure. No third parties can access the data to hijack transactions and steal funds.
Cryptocurrencies and blockchains are designed to hide user identities and locations. However, these days, crypto transactions are no longer anonymous, rather they are pseudonymous. People are mastering ways to trace transactions back to specific users.
This is where a VPN comes in. VPNs hide your IP address when you are trading on different platforms. They do this by embedding the VPNs IP to the data request rather than your machine’s. This means that hackers cannot trace your IP when you’re using a VPN. Additionally, privacy VPNs do not collect logs. This means that no one will be able to log the sites you visit. Therefore, VPNs help traders increase their levels of anonymity.
VPNs Encrypt Data
VPNs use high-grade encryption techniques to encrypt the data you send from your browser. A VPN will also help to encrypt the data received by your browser. This makes it hard for third parties to intercept and manipulate that data. As such, VPNs create a virtual data tunnel between your computer and the server.
This encryption plays a number of roles. First, it prevents malicious individuals from tracing your online traffic. This helps to improve the level of anonymity of traders. Second, encryption makes it hard for hackers to understand your online activities. They will not understand the difference between traffic from a trading website and a social media website. Hence, they improve the security level.
Access to Geo-Restricted Exchanges and Coins
Unfortunately, some exchanges restrict access to their sites in some countries. Some of these websites might have the cryptocurrency a user is looking to trade. By using a VPN, users from such countries can unlock access to these websites and trade their favourite coins. VPNs trick your computer and the website’s server to think you are in a different country. Hence, these restrictions will no longer apply to you.
For example, the US has restricted access to Binance.com in the US. Users can only access Binance US which is available in the country. Unfortunately, Binance US does not have as many crypto assets listed as Binance.com. As such, many US citizens use a VPN to access Binance.com to trade coins they cannot access on Binance US. Nevertheless, you should make sure that accessing such websites is not illegal in your country. Otherwise, you might find yourself in legal trouble.
Protecting Your Data
Crypto funds are not the only things hackers steal from traders. Hackers can also steal your personally identifiable data and use it for malicious purposes. For example, if you input your credit/debit card information, they may steal that for some online shopping.
Additionally, hackers can steal your information to sell it off. There are many black market websites for selling user data. Any sensitive information can be stolen and used for malicious purposes. VPNs can help you protect such sensitive information. They do this through encryption and DNS leak protection. DNS leak protection ensures that not even your service provider can log the sites you visit.