Chatbots are innovative technologies that allow making crypto trading easy and effective. There are copious operations that can be held with the help of smart bots. Yet, it’s not always possible to provide a proper security level of transactions via bots. There are some other ways to protect your digital money.
Why Chatbots Are Not the Only One Gamechanger in Crypto Trading
The coronavirus outbreak is stimulating copious innovations in crypto. Moreover, globalization and digitalization of world economies have boosted open financial innovations. Today, more and more businesses are exploring the diverse capabilities of blockchain and cryptocurrency. No wonder, the number of crypto exchanges is increasing day by day. They make the use of cryptocurrencies easy and comfortable. There is one more important aspect that should be considered when choosing a crypto exchange. It should be safe and secure.
The gambling industry, insurance agencies, and financial institutions are the largest users of crypto exchange platforms. If you look through RTG operators reviews alone, you will see that over 50% of venues have already started to accept cryptocurrency. And a significant portion of them cooperates with third-party platforms, which process their crypto payments. The same goes for financial and insurance companies.
A cryptocurrency exchange is an online platform where you can buy or sell any kind of digital asset. Crypto exchanges generate billions of dollars in trading volume. Top exchanges get about $1M in profits daily. No wonder, crypto exchange platforms are the number-one target for cybercriminals.
With all the above said, it is safe to assume that new game-changing trends in crypto trading will relate to both convenience and security. To achieve convenience chatbots are implemented.
Chatbots in the Crypto Industry
The capabilities provided by chatbot systems go far beyond giving responses to customers’ inquiries. It’s a big mistake to think that chatbots can only simulate conversation with human users. When it comes to crypto trading, chatbots have incredible potential. They can be applied in several ways:
- To monitor data on various crypto exchange platforms;
- To monitor changes in the market;
- To inform traders about the most crucial price movements;
- To track investment progress;
- To conduct exchanges;
- To buy or sell coins automatically;
- To trade on crypto exchange platforms.
These are only basic actions chatbots can perform. They are able to make the process of crypto trading as easy as possible.
Pros and Cons of Using Smart Bots
The first thing you should understand about using chatbots in crypto trading is that chatbots are artificial intelligence. You still have to set up the needed parameters before the bots start functioning. The bot can be programmed to self-learn. It means it can adjust to the changing crypto trading market. Thus, there are two main types of chatbots: simple and smart.
One of the biggest advantages of using chatbots is that they make trading available even to beginners. People who decide to start crypto trading need to gather and analyze lots of information. Simplified terminology and the easy-to-use interface of chatbots allow users to miss this step. What’s more, bots make calculated decisions and work without losing focus and productivity. You can hardly find a person who is able to do the same.
Chatbots function 24 hours per day. This helps to make the best deals and to buy coins at the most advantageous price. Moreover, interactive agents with artificial intelligence capabilities can help brokers convert, activate, and engage traders.
Yet, when it comes to using bots for conducting payments, financial companies tend to restrict the use of such tech. The reason is simple. Bots are a potential security weakness. Bots are software that can be hacked. That’s why you have to choose only reliable and trustworthy solutions. The best way is to build your own crypto trading bot. Yet, if you are not a pro in coding, it can be rather difficult. You should also set up an API key. It’s important to restrict the bot from withdrawing funds, too.
Two-Factor Authentication as an Extra Security Layer
Chatbots are rather effective helpers when it comes to crypto trading. Yet, without profound security measures, even the best chatbot can turn out to be useless.
Two-factor authentication, or 2FA, is one of the most practical methods to protect your funds while trading cryptocurrency. It requires two distinct forms of identification in order to conduct financial operations. This method protects against phishing, social engineering, and password brute-force attacks. With its help, you can secure your login credentials from hackers during crypto trading.
The 2FA process consists of 2 steps. First, you should enter a password or email to access your account on a crypto trading platform. Next, you should approve your action with a code sent to your smartphone or via biometric verification.
Multisig Wallets: Significant Peculiarities
Using multisig wallets is an efficient way to secure your transactions. A multisig wallet is shared by two or more users. They are called co-payers. The number of signatures can be either equal to or fewer than the number of co-owners. Such wallets allow users to get rid of security concerns. Escrow transactions become a reality with the help of these wallets. Yet, you should keep in mind that it could become a problem to recover a multisig wallet. It’s also rather difficult to set up this method of protection.
Cold Storage is a Must
It’s of prime importance to use safe crypto exchange sites, but it’s still not enough. You should protect the way you store funds. All the coins are kept in digital wallets. There are 2 main types of them — hot and cold. The latter option is considered more secure. Cold wallets are offline hardware wallets. You are to experience no data loss using them. Yet, it is more cumbersome to send coins from a cold wallet.
To sum it up, crypto trading is not only about extra profits but also about security. Thanks to modern smart chatbots, it’s quite easy to start trading and to become successful at it. Yet, alongside bots, it’s of prime importance to consider security issues. Cold wallets, 2FA, and multisig wallets are effective ways to make your crypto trading experience not only profitable but also secure.