With millions of users worldwide, the cryptocurrency market has proved to be a potent tool for many people to grow their assets and as well as for businesses to expand their reach. Some analysts even claim that this financial revolution might be the future of money. It has impacted various industries and, more interestingly, made financial transactions a lot easier and convenient for the participants. But it has some issues that have also triggered doubts among the newbies and startups in the industry. For instance, the incidents of hacking and fraudulent acts have long been hounding crypto agents and users. Best Security Practices-
If you’re wondering whether such a problem will be totally eradicated from the system one day, the answer is that nobody could say for certain. What most people are sure of is that it is an ongoing development that concerns developers. The roles of traders and investors are also considered of prime importance to curtail cybercrimes. Those startup companies who wish to raise funds through initial coin offerings may have to deal with such uncertainty. But there are best security practices, as discussed below the Best Security Practices, that may be followed to achieve desired results.
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- Implement Effective Strategies Against Security Threats
Acknowledging the fact that potential scams may possibly exist can serve as a starting point for the company to devise appropriate strategies. This is considered the non-programming side of an initial coin offering and may likely resolve apparent security concerns. One way for the company to address such a matter is by being alert for any signs of fraud and making every team member aware of what’s going on. Hence, it is encouraged to devote resources to education within the organisation as part of business development.
Likewise, it is equally important for a startup to observe consistent scanning of web platforms such as Facebook and Telegram. This would enable the discovery of suspicious activities and for the company to respond immediately. Another advantage of this practice is allowing the team to relay critical updates, display websites for an ICO, and educate community members on potential risks.
- Address Community Concerns Upon Discovery
Transparency is considered one of the strong points of cryptocurrencies, especially through public blockchains where transactions can be accessed. The majority of companies would normally release their code and also smart contracts for the ICO. However, it remains a challenge for investors to understand coding and examine pertinent details that could probably guide their decisions. This led many people to believe that the matter is more a formality than an actual step, which is also opposed by others.
Financial experts say that the Decentralised Autonomous Organisation is a perfect example of why companies should address community concerns. The agency could have utilised the company’s open-source code to review major data and consider precautions coming from developers about system vulnerability to threats. But since it ignored the warnings, millions of assets were lost as a consequence. This incident serves as a lesson for startups to take the matter seriously.
- Audit Company’s Underlying Smart Contracts
Smart contracts are deemed essential in facilitating trustless exchanges as rules for executing agreements that are completely automated and hard-coded into algorithms. However, these tools have a history of being a weak link in raising funds through ICOs. One example is the case of Ethereum, which had lost substantial revenues in hacking due to poorly designed contracts.
Thus, analysts have emphasised the importance of professional auditing for smart contracts to ensure security. This protocol would allow projects to detect problems that have the potential of resulting in catastrophes. Startup companies should always look at the high-profile attacks and data breaches that have been encountered in the past to address the matter accordingly.
- Focus on Protecting Your Users
The success of a crowdfunding process does not solely depend on achieving the targets of ICO. On certain occasions, it goes beyond that. Users are more likely to seek services in exchange for getting the tokens and helping raise the needed funds. Hence, the duty of the company may extend up to this stage as this could also affect the ongoing operations.
Industry players think that the security of users should be considered an utmost priority. This is where stringent measures are necessary to guarantee safe transactions in the network. Companies may devise strategies that include two-factor authentication, constant updates for any changes, and maintenance of activity logs for security purposes. These efforts are deemed important in preventing any legal issues that may arise from any technical or operational glitches.
Startup companies can always take advantage of ICOs as a potent tool to raise necessary funds and support their business operations. However, they should remember that such a strategy is not risk-free and omnipotent. It should be implemented together with the best practices in order to achieve optimum security and guarantee smooth transactions among participants.