There are layers to this question. Prospective or veteran Coinbase app users may wonder how secure their data is. Worldwide, apps of all types — from games to banking apps — are the target of threat actors to steal customer data. Is Coinbase safe from these attacks?
Others wonder if Coinbase is a safe way to invest in a volatile cryptocurrency world. Crypto receives mixed press for its inconsistency and lack of regulation, so does Coinbase represent safe financial living, or is it just gambling in disguise? Analyzing both perspectives, you can determine if signing up for Coinbase is worth the risk associated if any at all.
What Are Coinbase’s Security Measures?
Coinbase is the world’s leading cryptocurrency investing platform with the most users — making it the most profitable app for cybercriminals in the crypto world. Because it has such a valuable well of data, they must take it upon themselves to make a sturdy app for their members. They use techniques including:
- Data minimization
- Two-factor authentication
- Account locking
- Security notifications
- Machine learning algorithms
With these precautions, what does Coinbase do in the event of a breach? Historically, there isn’t much to do because the information isn’t widely sold or released.
Has Coinbase Had a Breach?
Over the years, Coinbase has publicized multiple security breaches. However, their user base is still loyal to the platform, as their cybersecurity infrastructure and risk management programs prevented severe losses. In February 2023, a Coinbase employee fell victim to an SMS phishing scam that gave away their login information from a mock link. However, Coinbase stated minimal information was revealed during this attack because their internal obstacles kept everything safe except for a few employee names and phone numbers.
Though, this isn’t the first time text messages have thwarted Coinbase.
Over 6,000 users had money transferred from their crypto wallets as hackers exploited a vulnerability in the SMS account recovery feature. Yet, again, Coinbase assured no customer data was released, and refunds were issued. So, is this a testament to their buff cybersecurity or good marketing?
How Safe Is Cryptocurrency?
Coinbase claims their app’s assets are 1-to-1 — meaning users hold onto their crypto, and Coinbase doesn’t lend or release it to other users.
Because cryptocurrency is decentralized, there is a concern about how chaotic the assets can be based on who buys and sells.
Unfortunately, this is the nature of the game until regulatory bodies institute standardization measures that keep the hills and valleys more stable. Because of this lack of oversight, investing in cryptocurrency isn’t necessarily safe, though many banks on financial gains through their trust in apps like Coinbase.
The safety of cryptocurrency also lies within the security of blockchain, the technology it relies on to generate and survive. Blockchain is the backbone of crypto resilience, as its unique hashing system and authentication measures provide the most accountability of any transactional agreement in history. However, threat actors prove every system is breakable, and this doesn’t exclude the cryptocurrency world.
How Can You Invest More Safely With Coinbase?
Coinbase best practices deeply crossover with investing best practices. However, there are a few more technical elements to safe crypto exchanges. Much of the traditional investing world has digitized, so these suggestions will crossover depending on your portfolio.
Experts recommend diversifying your portfolio. Having the majority of your investments in cryptocurrency will correlate with high-risk investments. Additionally, it’s crucial not to publicize the growth of your portfolio. Social media pressures may cause some to disclose market growth and how that impacts their investments — however, these admissions only encourage cybercriminals to act.
As index funds are the most trusted investments in traditional stock markets, popular cryptocurrencies are the safest ways to secure potential market gains. Though Bitcoin and Ethereum have rocky pasts — and futures — choosing big names over hot-off-the-press cryptocurrencies can promise to have more consistent trends.
Though many invest in smaller coins because they’re low-risk, the safest way to do it is with a known coin if you want to get measurable gains from cryptocurrency.
Security With Apps and Cryptocurrency
Coinbase has risks like every other financial investment app. However, there are extra concerns because of the nature of cryptocurrency. Without oversight, there will naturally be more data privacy and cybersecurity issues innate to the platform. When comparing Coinbase to other apps, they have more transparent policies and recommendations for users to take their security into their own hands. Proceed into all apps — including Coinbase — with evidence-based cybersecurity hygiene for the best experience.
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