Security is the password to Pandora’s Box, which is cryptocurrency. As cryptocurrencies continue to gain traction in the digital world, security is emerging as the greatest threat to the success of the new digital currency and the people using them freely.
Although cryptocurrency has plugged some of the concerns associated with fiat currencies, like fake currency, it has created some new security concerns. One characteristic that has fuelled cryptocurrency’s success is the lack of a central authority, which means expedited fund transfer. But that also makes security threats and easier loss of funds without proper security safeguards in place.
Organisations and individuals handling crypto must take serious precautions to secure their crypto wallets and transactions. We have all the crypto security tips you need to protect your crypto assets.
Table of Contents
Why Is Crypto So Popular?
The driving force behind the insecurity of handling cryptocurrency is how popular and valuable the market has become. Various factors have contributed to the success and popularity of cryptocurrency. These include;
It is decentralised
Cryptocurrency is independent. No centralised server keeps track of transactions, and there are no central authorities or bureaucracies as with fiat currencies. Using a peer-to-peer network, you can keep crypto in a digital wallet on your computer or phone and transfer it to different people. The lack of a ‘big brother’ hovering over your finances has attracted many people to switch to crypto and make purchases more freely.
Worldwide usage
Fiat currencies lose or gain value depending on where you’re in the world. That’s not the case with crypto. You can use it anywhere in the world. It’s a nifty way to use different currencies simultaneously without spending time to convert them or pay foreign exchange fees which can be expensive in some cases.
Inflation resistant
Cryptocurrencies are immune to inflation and deflation. Because there’s no central bank, the currencies use a distributed ledger system that runs on millions of computers worldwide with no adjustment for inflation as you send the currency across borders.
It’s pseudonymous
Crypto is designed to work in a peer-to-peer network. But that’s not to say it’s limited to private use only. Commercial enterprises and corporate networks are also accepting cryptocurrencies. The ability to send money and make purchases is behind the immense popularity of cryptocurrency.
The ability to send money or make purchases without revealing personal information about either party is irresistible. It is also what makes cryptocurrencies so secure. The transaction history can’t be tracked by your name or other identifying information.
What Are the Potential Security Threats on Crypto?
You need to know what you’re up against to bolster your crypto security. Crypto attracts a lot of attention from people with ill intentions, as most other things on the internet. Some of the leading security risks associated with using cryptocurrencies are;
Phishing
Phishing campaigns usually target crypto trading platforms. The purpose of phishing is to get access to your credentials which could provide access to your accounts. In most cases, scammers use homograph domains and websites that resemble legitimate trading platforms to lure users into disclosing their credentials to the attackers.
Hacked trading platforms
Another common security risk for crypto traders is trading on a compromised trading platform. It’s easy to lose your crypto assets when trading on such a platform. The attackers might also use information obtained from the APIs to program bots to withdraw funds from your account or perform fraudulent trades.
Compromised registration forms
Most cryptocurrency platforms have strict identification verification protocols. However, attackers can still inject codes into their registration forms that transmit your information to the attackers. The data collected can be sold or used to create accounts on other trading platforms.
Malware
Cryptocurrency-related malware has been on the rise over the past decade. Mining malware has emerged as a significant threat in these circles. Other types of malware include malware that steals cryptocurrency from wallets and fake tools that masquerade as legitimate ones promising users exceptional results.
Why Is Cryptocurrency Security So Critical?
Cryptocurrency has value just like fiat currency. The more you have, the more valuable you are. As such, you should deploy the best security tips and measures to protect your crypto assets. Without the right security features, you could;
Lose your crypto assets
With adequate security measures, losing your crypto assets is easier than you think. Attackers can easily obtain your information or swallow up the crypto coins you leave sitting on the exchange. Amassing a decent amount of crypto takes time and resources, which makes this a huge loss for any crypto holder.
Legal culpability
Information obtained by attackers could be sold on the black market or used for other illegal acts. Because the information belongs to you, you might be held accountable for any transactions completed using your details. It’s why attackers try to obtain the information to use it for illegal transactions.
The Best Crypto Security Tips
Security in the crypto world has come a long way. However, the advanced security technologies deployed on most platforms only work if you use them.
Let’s breakdown the best crypto security tips into three primary categories to make them easier to follow;
- Internet security
- Crypto security
- Crypto wallet
Internet security
Before dipping your hands into cryptocurrency, you should have a robust understanding of the internet and some internet security tips. Having good online security forms the basis of your cryptocurrency security.
Have good passwords
Passwords are the gateway to your information. So you should create strong passwords that are lengthy, hard to guess and complex. The longer the password, the better. But having multiple such passwords is hard to remember.
Have a password manager
A password manager is an excellent solution to having good passwords. Password managers often help generate random passwords that are complete gibberish, and you don’t have to remember them. You just need to remember one password to unlock the manager.
If you have to create a memorable password, go for sentence-form passwords with connectors in between. They are harder to guess and almost impossible to crack.
Don’t use the same password
You should never use the same password across multiple sites—especially where you store your crypto assets. If one gets compromised, there’s a good chance all will be compromised. A hacker can easily go down the list and access all information.
Don’t store your passwords in a browser
Most browser versions save you the trouble of remembering your passwords by offering to save them and automatically remember them for you. It’s a nifty feature that most users are more than eager to use. However, if someone gets access to your device, the browser will serve them up easily because they are available. If you have to save your passwords, use a password manager or a fireproof safe to which only you have access.
Avoid typing your credit card information into websites with no encryption
If you shop online or pay for bills and services, most of the services you use will offer to save your credit card information to make the next payment easier and stress-free. However, some of these websites have basic security features at best. If the website is compromised, hackers can access your information. This is more so the case if the website has no encryption.
Turn off potential ‘listening’ devices
You can never be too cautious when dealing with credit cards, crypto accounts, or trading platforms. If you’re feeling sceptical, turn off devices like Echo or Alexa and anything with the Facebook app installed. It sounds crazy, but it’s an extra layer of protection.
Only use secure websites
How do you know a website is secure? The URL begins with HTTPS://. It’s a small and often overlooked feature that could easily land you in trouble. Most phishing websites are not secure and only have the HTTP:// prefix. It’s a huge red flag that you shouldn’t ignore.
Enable 2-factor authentication
Enable two-factor authentication anywhere and everywhere, especially for anything finance related and your email. Although this is not foolproof, it makes a hacker’s job much harder and makes it easier for you to be notified when your account is compromised.
Other general internet security tips include locking up your home internet with a strong password and enabling a separate guest Wi-Fi.
Crypto Security Tips
After fortifying your internet security, you can shift your focus to crypto security. Here are a few ways you can make your crypto platforms more secure;
Key / seed generation
A cryptosystem requires you to create cryptographic keys and seeds. When generating them, ensure confidentiality and opt for something hard to guess. Confidentiality ensures that the newly created keys don’t fall into the wrong hands. Using unguessable numbers protects against hackers and unintended users accessing the system while impersonating you.
Secure your seed phrase
The seed phrase is the most important consideration when securing crypto. It’s also called the recovery phrase. It’s a 12-word phrase that allows you to recover your crypto on another device. It’s essential that no one else has access to this phrase. The best way is to memorise it.
Alternatively, you can split up the words and store them in different locations, like multiple fireproof safes.
You can also encrypt it and store it in a password manager or store parts of it in several password managers. The bottom line is never to give out the phrase or send it over the phone or email to anyone who asks for it.
Research on the best crypto exchanges
With all the buzz surrounding cryptocurrencies, it’s easy to get sucked into the excitement and get on the first crypto exchange you find. That could be a fatal mistake. You should research crypto exchanges and invest adequate effort into finding a reputable one before investing your money.
Take some time to learn and understand crypto exchanges and their security features. Run a check on the exchange and, if possible, consult more experienced crypto advisors in communities. You can also read reviews and observe the comment section for feedback from other crypto holders.
Use the same strategy when finding wallets, mobile apps, and brokerages associated with cryptocurrency.
Secure your personal device
The device you use should have the latest virus definitions to defend against newly discovered vulnerabilities. You should also use a powerful anti-virus and firewall to boost the device’s security and deter hackers from taking advantage of any potential weaknesses.
Change your password regularly
We cannot emphasise enough the essence of strong passwords when talking about security. Besides creating a strong password, you should also change it regularly. If you have multiple crypto wallets, have different strong passwords for each.
Diversify your investment
Diversification is a good strategy even in cryptocurrency, and it stands true. Don’t put all your money in one cryptocurrency simply because it’s the name you recognise, or it’s currently enjoying a bull run in the market. There are plenty of other viable options in the market. It’s good practice to spread your investment across various currencies. You mitigate losses and can take advantage of currencies enjoying a rise in value.
Crypto Wallet Security Tips
At this point, you understand enough about crypto and possibly have some currencies under your belt. But you need somewhere to store them. This is where a crypto wallet comes in, and it comes with its own set of security tips.
Don’t keep most of your crypto on an exchange
Keeping most of your crypto on an exchange seems like a surefire way to grow the currency, but you risk losing everything if the exchange is hacked or goes bankrupt. Because of the number of transactions handled through exchanges, they are the focus of most hacking attempts. Instead, you should consider placing your crypto in a non-custodial wallet, where you have control of all your private keys.
Choose the right crypto wallet
Seeing how vital a crypto wallet is to the safety of your cryptocurrencies, you should take the time to find the right one. Review each option’s features, security standards, and technology before settling. For enhanced security, you can also use a hybrid strategy involving offline storage with cold wallets.
Maintain multiple wallets
You’ve possibly heard of the saying, less is more. In the case of crypto wallets, more is better. There’s no limitation for wallet creation. The more wallets you have, the more spread out your crypto assets are and the lower the chances of losing all your assets if hackers manage to access one of the wallets.
You can use one wallet for your daily transactions and keep the remainder in separate wallets to protect your portfolio.
Use a cold wallet
Cold wallets don’t connect with the web. Therefore, they’re immune to cyber attacks, unlike hot wallets. These types of wallets are also called hardware wallets and are the most viable options to store your private keys as they come encrypted. Using a cold wallet can drastically reduce exposure to cyber security risks and protect your portfolio from hackers.
Closing Remarks
The crypto world is a relatively young one, and despite its massive potential, it is still finding its ground. Security vulnerabilities are still being identified, and the technology is growing and improving its safety features. Whether you’re new or a seasoned crypto private or commercial investor, you need to practice these security tips to bolster the safety of your investment and portfolio. As crypto becomes more prevalent and valuable, attempts to steal it will only increase. Equipping yourself with the best tips and security habits could ensure you’re not separated from your crypto assets.
