Amid the soaring popularity of cryptocurrency, investors and traders alike have become a prime target by cybercriminals. While hacking the blockchain borders the impossible, there have been countless cyberattacks on cryptocurrency exchanges and crypto wallets since its inception in 2009. With this in mind, below are crypto security tips to help you safeguard your digital assets.
Spread your digital assets across various wallets
Just like any other investment, don’t put all your crypto eggs in one basket. Since there is no limitation on the number of wallets you can have, put your digital assets in multiple wallets. Use one wallet for daily transactions and keep the rest separate. Spreading your asset portfolio minimizes the severity of losses when fraud happens in any of your crypto accounts.
Use secure internet
You must have heard that public WI-FIs are unsecure, and as such, don’t use them to access sensitive accounts. The same principle applies when making crypto transactions. Use a secure internet connection. Otherwise, you will become fodder for cybercriminals.
Even when using home internet, you should use a VPN for an extra layer of security. A VPN encrypts your information, shielding your online activities from the prying eyes of hackers.
Use cold and hot wallets
Suppose you have $50 million in cryptocurrency: how should you store it? Unless you want to trade the full amount in one day, you should use separate wallets. For daily transactions, use hot wallets (such as online, cloud, and software wallets). However, for digital assets that are not changing, a cold wallet is the more viable option.
You see, cold wallets (like paper and hardware wallets), unlike hot wallets, aren’t connected to the internet, making them less prone to cyberattacks. To put this into perspective, in 2019, the cryptocurrency exchange BITpoint in Japan discovered unauthorized withdrawals to the tune of $32 million in its hot wallet. However, the exchange didn’t experience any malicious activity in its cold wallet and cash holdings.
Beware of phishing
Whether connecting to a wallet or checking an exchange for Bitcoin prices, be sure you are using the right address. Phishing is a prominent cybercriminals tactic to disguise as a genuine entity, stealing sensitive information from unsuspecting online users.
Typically, hackers will email enticing links that prompt you to log in using your crypto details. Once you access these disguised sites, your private information leaks, and hackers can use it to do whatever they want. To deter phishing, always ensure that the website address is correct and matches the one in your online wallet or exchange.
Amp up your security policies
Update your crypto policies to mitigate as much risk as possible. For instance, to up your check and balances game, the person initiating a withdrawal can’t be the same person approving the transactions and wiring the funds. As such, consider dual control procedures when making cryptocurrencies, accessing vaults, and so forth.
If it takes one crooked individual to compromise your crypto security, your systems are not fraud-proof. Try as much as possible to eliminate one single point of failure through proactive risk management strategies.
Work with reputable vendors
Whether sourcing for cryptocurrency exchanges, wallets, apps, or brokerages, do due diligence by scrutinizing their platform’s security features. Trustworthy vendors should devise security features like two-factor authentication and SSL/TLS encryption.
Improve your security measures
How strong are your passwords? How safe are your devices? Don’t underestimate the importance of your password in stepping up your security measures. Most people make the mistake of using similar passwords across different devices, apps, and accounts. This password recklessness makes you susceptible to hacking. Instead, use hard-to-guess passwords and change regularly. Better yet, opt for multi-factor authentication for optimal security.
For physical devices, install an antivirus software program. More so, refrain from installing suspicious software programs. If not sure about the software you want to download, make Google your friend. A simple online search will give you access to online reviews and feedback about the software, helping you establish its authenticity.
As the cryptocurrency industry continues to grow in size and nature, cybercriminal tactics keep evolving. In light of this, keep your safety precautions up to date to thwart any cyberattacks on your digital assets.