5 Effective Ways To Protect Your Cryptocurrency
Along with the development of the cryptocurrency era, there have been a wide variety of hacks, thefts, or scams occuring. The 2022 pace of roughly a hack a week is in line with last year, but the amount stolen is rising. Since August, there have been 37 hacks in 38 weeks that have drained approximately $2.9 billion worth of cryptocurrencies. That is on par with the $3.2 billion stolen in all of 2021, according to the analytics firm Chainalysis.
Along with the high cases of scams, crypto users should equip themselves with various measurements to protect their cryptocurrency. This article will provide you with some of the most efficient ways to secure your crypto assets.
Do your research
Before making a decision to invest a single dollar, investors should learn and carefully research which platforms to use or which projects to invest in, the platform’s security features to understand how your data is protected, etc. While there are a variety of exchanges that allow investors to purchase and trade cryptocurrencies, you should have some study reviews and make your own analysis to guarantee risk management.
Store your cryptocurrency in cold wallets
Unlike hot wallets, cold wallets prevent users from being vulnerable to cyberattacks due to the fact that they do not connect to the internet. The cold wallets are encrypted, which helps keep your keys secure.
In 2019, BITpoint — a Japanese exchange detected an unauthorized withdrawal of $32M from its hot wallets in multiple cryptocurrencies including Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ripple targeting over 50,000 users. However, the exchange also informed that its cold wallets and cash holdings were not impacted by the incident.
Use a strong password
Your password should be at least 16 characters, making it complex and unique for your accounts. Using password managers like 1Password or Dashlane can be recommended in order to create and remember your passwords.
Never share the recovery phase
The recovery phase or secret key is used to verify whether the person sending or receiving digital currency is the owner of the wallet being used or not. If somebody has access to your private key, all of your cryptocurrencies might be stolen. Therefore, it is crucial to keep this information secure and never share it with anyone else. Instead, you should print it out to avoid information leaks or hack attacks.
Avoid brand impersonators
Scammers create fake websites that look like real exchanges but are designed to steal account information. You should double-check the web address before logging into your account or providing any of your personal information or credentials.
Below is the image of a phishing domain using an Internationalized Domain Name that closely resembles www.coinbase.com; however, looking closer reveals that the character accent below the “i” is different.
Securing your crypto might be a daunting task; however, proactively taking methods towards cybersecurity pays off in the long run. By doing your own research, storing your assets in cold wallets, and staying vigilant, you should be able to reduce the risk of a breach to a minimum.