Securing Bitcoin Part 2
After the popularity of our previous article, and incidents we see in the crypto market space, we decided to write a second article. Instead of focusing on wallets and the storage of cryptocurrency, we will be looking at some security tips to help new users.
Throughout 2017, multiple enterprises were targeted by cyber criminals for their digital assets, mainly BitCoins and Ethereum (or Ether for short). With more investors joining the digital currency game, it is increasingly important for all involved parties to be aware of the risks and how they can protect themselves from becoming victims of this new wave of cyber-financial crimes.
Risks of Bitcoin
Bitcoin, the infamous digital asset that sparked a brand new era of Internet currencies, was created in 2009 by an unknown individual operating under the alias, Satoshi Nakamoto. According to the infamous Bitcoin White Paper, the new currency required no middleman for transactions. This means: no banks, no transaction fees, and no need to reveal your true (or digital) identity. Fast forward 8 years, Bitcoin, now worth around $7,400.00USD per coin, is rapidly increasing popularity amongst mainstream investors and businesses. Some of which are even accepting such Internet currencies, also known as cryptocurrencies amongst the more tech-savvy communities. However, dealing in cryptocurrencies carries a dark risk.
Managing cryptocurrencies like Bitcoin, is very different to managing money with your local bank. The bank is responsible for the security of your funds, protecting them from harm or theft. If your funds got stolen from your bank-account, there is usually someone responsible (or to blame) for the security breach. Subsequently, they can fix the issue and even initiate a chargeback. However, with bitcoin, it is totally different story. If the user is unfamiliar with how to properly handle bitcoins and other cryptocurrencies, they can risk losing lots of money because of simple mistakes, and there is nobody you can call on to fix the issue. With bitcoin, you are your own bank and thus making it more important to ensure you possess adequate security measures to protect yourself from being targeted by greedy cyber criminals.
At Horangi, we have witnessed an increasing frequency where anyone handling or working with cryptocurrencies, like Bitcoin or Ethereum, are being targeted by cyber criminals. However, given the impregnable nature of blockchain technologies that forms the vary foundation of cryptocurrencies, most attackers have focused on targeting the broader operational architecture (i.e. websites, logins) to gain access. So, here are a list of 5 practices you can adopt to better protect yourself and your cryptocurrencies from the prying hands of cyber criminals:
- Adopt multi-factor(2FA) authentication
Keeping your bitcoins online or buying it on an exchange market is risky. To better protect your digital funds, ensure your online accounts are secured with multi-factor authentication. This practice is commonplace nowadays with conventional banks and even by online services (i.e. Google), where you login to your account, and then have to key in a second password (usually a randomly generated string of numbers) usually sent to your mobile-device or digital key fob.Without this device,criminals cannot gain access to your online account, even if they even have your credentials.To learn more about multi-factor authentication, click here.
2. Backup regularly to your wallet
If your mobile phone or PC has corrupted and all of your data lost, how can you get back your data? You can’t. Sorry, but all of your invested coins and hard earned cash are now in the hands of the bad guys . Therefore, performing regular backups is the best practice in the digital world.
3. Don’t trust anyone from online, do proper research
Newcomers into the cryptocurrency game tend to make mistakes. Most only want to invest bitcoins, and are often lack experience in the cyber security side if the game. The most common online scam targeting newcomers is the “Bitcoin doubler” campaign. This involves the scammers to manipulate your trust by promising to double your investment. When in reality, they double their investment by stealing yours and you are left with nothing.There are such opportunities like this out there, especially with the increasing number of cryptocurrency funded projects, called Initial Coin Offerings (ICOs), hitting the mainstream market. You’re better off doing your research properly and investing in the right ICO to make the most out of your coins. Kevin Roose described this succinctly:
“If you’re having trouble picturing it: Imagine that a friend is building a casino and asks you to invest. In exchange, you get chips that can be used at the casino’s tables once it’s finished. Now imagine that the value of the chips isn’t fixed, and will instead fluctuate depending on the popularity of the casino, the number of other gamblers and the regulatory environment for casinos. Oh, and instead of a friend, imagine it’s a stranger on the internet who might be using a fake name, who might not actually know how to build a casino, and whom you probably can’t sue for fraud if he steals your money and uses it to buy a Porsche instead. That’s an I.C.O.”
4. Choose the best wallet for your bitcoins
There are many different online wallet options for your bitcoins. Choose the most secure one to store bitcoins is a wise choice. If you prefer a hardware wallet to store bitcoins, Bitcoin Trezor may be the best choice.
5. Don’t reuse your wallet addresses
Do not reuse a wallet addresses. This is because bitcoin is not anonymous and its blockchain is publicly accessible.
Conclusion: Join the game but be smart about it.
Cryptocurrency is a hot element amongst investors right now, especially with more mainstream investors and venture capitalists joining the game, the value of such internet currencies are only bound to increase. Learning how to invest with BitCoins is one thing, but given its lack of internationally recognised or enforceable regulations, it remains a little bit like the wild west. It is entirely fine to purchase, manage, and invest in coins. Just be smart about it by putting equal effort into both your investment planning and security. You want to be rich? You can. Just protect yourself from the criminals waiting around that digital corner.
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