How To Protect Your Crypto From Hacks

Cryptocurrencies can be used to trade your way to riches, but your funds can also easily get hacked or stolen if you do not take the appropriate steps to secure them. This short article will give you some tips to keep your funds secure while you navigate through the crypto space.

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General tips

DO:

• Have a backup for everything: passwords, apps, seeds, etc. Store these in a secure location. Even better if this location is not physically near you in case of fire, earthquake or when Cthulhu awakens.
• Use unique and strong passwords. You can use a password generator for this.
• Lock your computer when you are AFK. You wouldn’t leave your front door open when you leave the house, so don’t leave your system open and vulnerable.

DON’T:

• Don’t use a public WIFI to access your exchanges or funds. You wouldn’t drop your pants in public, so why drop your name and password in public?
• Don’t tell people in too many details about your security practices and information. They might like you for being helpful, but they will love you if they can access your funds.
• Everything is hackable, but find a way to make it so hard for hackers that they will give up and start questioning their existence.
• Don’t make it too hard for yourself. Make sure you can always access your accounts, even if you lose one method of verification or quickly have to access your funds. +1 if you have methods in place in case you get amnesia.

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Funds on exchanges

You probably have some crypto on exchanges to trade. It is important to avoid depositing all your funds to exchanges. They are a central point of failure and can be hacked or could exit scam. To secure the funds you do have on exchanges, here are some practices that keep your accounts safe from intruders:

1. Do not use your public or regular email address. Use a brand new email address created especially for these exchanges. Bonus points: you will be even more secure if you use a unique email address for every exchange.

2. Generate a unique, secure password for every exchange.

3. Keep track of the email addresses and passwords using a password manager. Secure this password manager with a written backup and unique memorizable password. You have to remember this one because you will probably access this often.

4. Enable Two Factor Authentication (2FA) on your exchange. With 2FA a user is granted access only after providing multiple passwords, codes or other factors of evidence to an authentication mechanism. On exchanges the first factor is a password. The second factor utilizes in most cases a mobile phone.

• Use an app like Authy. In contrast to Google Authenticator, if you lose your phone with Authy you can use the password to restore the program on a different device. Don’t forget to safely store and backup this password.
• Don’t use SMS authentication. This is not a safe 2FA method. The network can be hacked or SIMs can be hijacked.

5. Go Double Dutch! Add 2FA to your email account. Hackers might try to access your email account and try to retrieve your exchange password through your email address. 2FA keeps the hackers away.

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Hot and cold wallets

You can store your cryptocurrencies in a wallet that is connected to the internet. These so-called hot wallets can be accessed through your browser (e.g Metamask or MyEtherWallet) or from your desktop (e.g. Electrum or Exodus). These wallets have a variety of ways to access them but make sure you have a secure password. Carefully follow the instructions when setting up these wallets to know what can be done to secure and back them up.

Hardware wallets like Trezor, Ledger or a USB stick are called cold wallets. Cold wallets are crypto wallets that are not connected to the internet. You can carry this wallet with you, but it might be safer to store it in a secure location. Make sure you write down the recovery phrase or seed and secure it like a hot wallet. Back up the device itself with a second instance and store it in a separate, secure place. Both Trezor and Ledge offer a backup pack in their stores.

In most cases, a seed can be generated for each hot or cold wallet that can be used to back up the wallet. This seed is a phrase that is usually 12 or 24 words long, which is used to store all the information needed to recover your funds. Secure your written seed phrase using multiple copies stored in multiple secure locations like a vault or hidden in an attic. Put these backups in plastic bags to prevent decay. Don’t store these online in mail accounts, Google Drive or Dropbox.

Conclusion

It can be quite a hassle to keep your cryptocurrencies safe, but it is necessary. It only takes a bit of effort in the beginning to implement these best practices. Hopefully your funds are safer from now on!

If you have more tips, let me know in the comments. I’ll gladly add them to this article.

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