Keeping your Cryptocurrency Safe – A Complete Guide

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2020 turned out to be a major year for cryptocurrencies, as the entire market surged massively, going beyond the highs it had achieved in 2017. The market is still going strong in the first quarter of 2021 and is not expected to slow down any time soon. The popularity and the increase in prices of Bitcoin and Ethereum mean that these digital currencies have become a target for hackers who are interested in getting these valuable assets for themselves. According to cybersecurity experts, the economics of hacking indicate that cybercriminals will continue to focus on these digital currencies, as their values go up and they become more prevalent in everyday lives. 

When it comes to tracking the work of these hackers, it can definitely be a major challenge because they can eliminate their footprints digitally. When a crypto account is hacked, investors don’t have a legal recourse they can use because the virtual currencies are still unregulated by a central bank or a government entity. So, how do you keep your cryptocurrency safe? Here are some tips that can be helpful:

Use a Hybrid approach for Digital Wallet Security

The popularity of online wallets has also gone up, which has also attracted the attention of these hackers. Physical or offline wallets should be given greater preference for storing the majority of your cryptocurrency and only a small amount of crypto should be kept in your online wallet for maximum security. In addition, you should keep your physical wallet in a secure place like a safety deposit box or a safe. 

Moreover, it is a good idea to keep your public and private keys separately. You should secure both of them with strong passwords and use multi-factor authentication whenever and wherever possible. As cryptocurrency starts becoming more mainstream, more traditional solutions will emerge, but for now, you are responsible for the safety of your cryptocurrency. 

Two strong Passwords are Vital

You should never make the mistake of reusing your account passwords, especially since crypto platforms and services are a hot target of hackers these days. Even if one account gets hacked, the rest of them will also be compromised and this can result in hefty losses. Even though crypto is undoubtedly an innovative technology that appears to be evolving quickly, the easiest and quickest way of securing your wallet is with tried-and-tested security measures. 

You can limit your exposure by opting for a strong and unique password for every wallet, with two-factor authentication enabled. Plus, always rotate your passwords routinely and you can even use a trusted password manager for automating this process and eliminating the guesswork. 

Only use reputable Crypto Wallets, Brokers, Exchanges and Apps

Before you decide what platforms to use, it is essential that you do careful research. Assess the security features of every platform in order to understand how they will protect your data. The entities you are trusting should use the best security practices, such as using air-gapped devices for storing crypto and keeping them offline, SSL/TLS encryption and requiring multifactor authentication. It is a good idea to use more than one crypto platform, as long as you use different and complex passwords for each. You should have a secure password manager to ensure that your passwords won’t be lost.

Take Precautions against Mobile Phishing 

A lot of people who use a crypto wallet have a mobile app for managing it. Since these digital currencies increase in price, this gives motivation to malicious hackers for targeting investors with numerous mobile phishing campaigns in order to steal your login credentials. These social engineering attacks can be carried out from anywhere on a mobile device, which includes social media, texts, email, or third-party messaging platforms. 

Other than phishing, there are also various malicious mobile apps that have the hidden ability to watch your activities on a screen or tracking your keystrokes. A number of people have begun to install antivirus software on their smartphones and tablets, similar to what they do on their computers. Considering the amount of data you have on your phones these days, it is undoubtedly a smart move.

Understand the Methods of Protecting your Crypto

More and more people are making investments in cryptocurrencies nowadays, but most people don’t have a technical background and are only interested in diversifying their portfolio. Since there is no central bank or authoritative organization that manages these digital assets, the responsibility of protecting the money is on the investor. If they suffer from a loss, the possibility of making a recovery is miniscule. Therefore, you need to learn about secret key encryption, cryptominer malware protection, and recovery seed protection. 

Avoid sharing the Private Key

The purpose of the key is to validate that the person who is receiving or sending the digital currency is the actual owner of the wallet. Therefore, you should never share this private key with anyone and the best way to keep it safe is through cold storage. Essentially, this means that you print out your private key and eliminate any and all digital traces of it. Using a seed is the only way of recovering your private key and it is a series of randomly generated words that can be leveraged by the user. You should write or print this seed phrase on paper and store it somewhere safe. Keeping it digital is a risk because hackers can get anywhere these days.

Don’t use Wallets hosted by Providers

Methods of storing Bitcoins or other tokens involve wallets hosted by providers or those hosted on desktops or laptops. The former is considered the worst option because they can store your private key on their servers, which leaves it out of your control. Most people go with this option because it is the least technical, but your private key is left vulnerable and if the provider’s server is breached, your key will be compromised. It is best to go with a hardware wallet, which is a device like a USB that can encrypt and store your private key, along with other relevant details.