As cryptocurrency has risen in popularity, it has also become a bigger target for hacking and other forms of compromise. Because cryptocurrency is still unregulated by the government, there are no legal repercussions that a victim of theft can take, so it’s important to take the proper precautions to protect your cryptocurrency. Here are a few tips for avoiding theft and being safe with your investments.
1. Hybrid Wallets
Many people involved in cryptocurrency investments make use of online wallets, storing a small amount there for active use and keeping the rest in an offline wallet. Your offline wallet can be physical, whether you’re using a USB or CD to store it, and should be kept in an extremely secure location like a safety deposit box. A good firewall or microsegmentation may be enough to protect an online wallet, but in the case of a security breach, you want the majority of your currency to be stored elsewhere.
Both wallets should be secured with multiple keys and passwords and should have multiple forms of authentication. These might seem like great lengths to go to and you may think it’s unnecessary to be so cautious. But no traditional form of security has been created for cryptocurrency as of yet, so it’s up to you to secure your currency as well as you can.
2. Multiple Passwords
If you’re using several cryptocurrency apps or programs, it’s vitally important to avoid using the same password twice. You should be creating every new account with the assumption that it will be broken into, and keeping each password unique will make sure one security breach doesn’t guarantee another. Enable password rotation whenever it’s made available, and keep your secondary authentication methods up to date.
3. Reputable Platforms
Since cryptocurrency is a relatively new concept, there are guaranteed to be some sketchy, less-than-safe platforms out there that you should avoid at all costs. Before deciding on a specific platform, such as a wallet or brokerage, do plenty of research to gauge its reputation in the industry. The best platforms will have tons of security features and be upfront about how they’re going to keep your data safe. Don’t just jump on trends, either, as hype can be manufactured and doesn’t guarantee a platform’s safety or authenticity.
4. Antiviral Software Apps
You’re most likely using apps to track and move your cryptocurrency, and that can be a totally safe and valid way to operate. But because phones, in general, are at risk of phishing attacks, that means your currency is at risk, too. These attacks can come in the form of a text, a message on social media, even your email, and are usually attempting to gain access to your phone so they can log keystrokes or watch what you’re doing on your apps. While you may have never thought to install antivirus software on your phone, it’s definitely a wise thing to do to avoid security breaches via phishing.
5. Your Secret Key
During cryptocurrency transactions, the secret key is how users determine that the coins are being sent or received by the wallet’s owner. It’s vitally important that you never share this key or keep the information somewhere visible to others. If you’re concerned about the safety of your key, you can make use of cold storage, meaning offline, or use a “seed phrase”, a list of words needed to get access to coin storage. Having layers of security for your key is a great way to give yourself peace of mind about the safety of your currency.
6. Provider Wallets
Lastly, make a practice of avoiding wallets offered to you by your provider. They may seem like an attractive option at first since they’re set up and ready to go on your desktop. But giving access to your provider means they’ll be storing your key on their servers, and it’ll no longer be in your control, so it’s best to avoid this option.
Cryptocurrency is an exciting new frontier. Use these tips to participate with the knowledge that your currency is safe from potential attacks.