How to Secure Your Crypto
Most people are still skeptical about investing in cryptocurrency due to the myriad security risks involved, especially when the alleged user has the sole responsibility to protect their cryptocurrency investment. Moreover, if your cryptocurrency gets stolen or lost, it’s frustratingly difficult to retrieve it. In contrast to Fiat-insured bank accounts, cryptocurrency hinges on decentralized and unregulated processes, and therefore might not have due legal back up.
Cryptocurrency is geared towards mainstream adoption, and just as its popularity grows on a daily basis, so do the security threats keep growing and evolving as well. Almost $5 billion has been stolen from crypto exchanges and wallets since its inception, and there have also been other multiple attacks too that have led to tremendous losses. The list is an endless pool.
There are a variety of ways by which hackers can steal your cryptocurrency, ranging from stealing or guessing your password, to hacking an exchange platform, to phishing. But the most popular attack is stealing the private keys of a crypto wallet which gives its holder unhindered access to all the funds in the wallet.
Although these risks abound in online transactions, there are a lot of notable practices that can help safeguard your crypto wallet.
How to Secure Your Crypto Wallet
Store your cryptocurrency in a cold wallet
One of the best steps to secure your crypto wallet is to store your cryptocurrency in a cold or hardware wallet. Where you may need some of it for online trading, it’s only advisable to store most of it offline and keep what you need in the short run. A cold crypto wallet allows you to set your own private keys that can be used to access your funds, although losing it is synonymous to losing access to all your investment. Not to say that you can’t hire a private hacker to do the job of retrieving the key, but there’s no much certainty in that accord. It’s essential to never share your private key with anyone, and to store your private key in a physical space such as a safety deposit box or fireproof safe for maximum security.
There are also major concerns about storing most of your cryptocurrency with online providers. Since they have access to your private key, if they get hacked and your private key is compromisingly swamped, you could lose unimpeached access to your funds. Although you may want to reduce risks by holding multiple crypto wallets so as to cancel out the single point of failure, safekeeping more than one private key has its own complexities.
Beware of phishing
Phishing refers to a target attack where the attack pretends as a legitimate body to acquire your important details. People often falls prey to it. Phishing occurs when you log in your cryptocurrency exchange on a wrong site, or by clicking on some random link, so you need to avoid doing so. Most importantly, do not trust random texts, emails, or chat boxes that ask for your personal information, and make sure to double check the website details are correct before making any payment.
Use reliable exchanges for your transactions
As an investor, there’s a need to understand that some exchanges have better security protocols than other. In this case, before making any transactions, it’s extremely important to research the cryptocurrency exchanges that have been compromised in the past, which in turn explains the alleged exchange must have poor security protocols and existing vulnerabilities. This will help you stay away from them.
Most cryptocurrency exchanges do not have legal recourse in the case of a scam or cyber attack, and so you can lose all your proceedings once it’s compromised. That’s why it’s imperative to trade with an exchange that runs on best security protocols such as TLS/SSL encryptions and multi-factor authentication.
Multi-factor Authentication (MFA)
MFA helps to create a defense layer on your account using a password, security token or biometric verification. If you want to set up MFA, you can select either SMS or a two-factor authentication (2FA) protocol which is better in cases where the attacker gets hold of your SIM card.
Change your password regularly
In today’s world, it’s quite unfortunate that we can only assume that our passwords will eventually get compromised. To protect your password, you must set a complex key and store it safely. It’s also advisable to change it every six months, and should not reuse an already existing password when choosing your password.
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