Cryptocurrencies are becoming more popular than ever, but to take advantage of their benefits, you need to make sure you do it safely. And that’s why we’re here!
The world of crypto is not without its pitfalls when it comes to security, so I put together a list of the 10 most important things you should watch out for. There are many scams and bad actors out there in the crypto sphere. But don’t worry, you’ll be able to spot them if you know what you’re looking for. So let’s dive right in!
Always Use Two-Factor Authentication
Two-factor authentication adds an extra layer of security to your account. To use it, you have to log in with a password, and an additional code sent either by text message or generated by the Google Authenticator app.
A hacker could potentially gain access to your email address and password through a phishing scheme or other attack, but it’d be difficult for them to get the second code, which is only good for a few minutes. It’s also possible that your phone gets stolen, so store your backup codes somewhere safe that only you can access!
Use VPN When Trading Cryptos
VPNs can help you maintain your security while trading in cryptocurrencies. A VPN is a Virtual Private Network that allows you to send and receive data over the internet anonymously and securely. By using a VPN, you will be able to conceal your online identity and location, sending all the network traffic through an encrypted tunnel so your ISP won’t be able to spy on your network.
VPNs also get used for bypassing geo-restrictions. It means if a piece of content gets blocked in one country, then by simply connecting to a VPN server from another country, you can access it easily.
Another advantage of using VPNs is that they can help reduce latency. You can ping (the time taken by the computer to communicate with other distant computers) when playing games or using applications like VoIP, where real-time communication matters a lot.
Choosing a Good Password Manager
Password managers such as LastPass, Dashlane, and RoboForm are among the best tools you can use to keep your passwords safe. They create a central database where you can store all your passwords in an encrypted format.
You’ll only need to remember one master password to access this database. The best part about using a password manager is that it helps you generate new and unique passwords for each of your accounts.
This way, if one of your accounts gets hacked, hackers won’t be able to use the same credentials to access other accounts.
Avoid Using Debit Cards for Buying Cryptos
Many cryptocurrency exchanges offer numerous payment modes to purchase cryptos. These can include the likes of OKX (brand), which offers you to buy cryptos with a credit card, debit card, or any other mode of payment. However, you should:
- Never use a debit card to buy cryptocurrencies.
- If you don’t have a credit card, use your PayPal account or other alternative methods to buy cryptos, such as Skrill and Neteller.
- If you are buying cryptos on exchanges like Binance, ensure that the trading platform is legit and trustworthy.
- Always use a secure internet connection when accessing crypto wallets and exchanges online.
- Never share your private crypto keys with anyone (not even your wife).
- Create multiple backups of your cryptocurrency wallet’s private keys and store them on USB flash drives, hard drives, or paper wallets in different physical locations (away from home).
Use Cold Storage for Storing Cryptos
Cold storage refers to the process of storing cryptocurrencies offline. Cold storage is the most secure method for storing your cryptos. Cold wallets are not accessible to hackers, and they are also not prone to online attacks. There are three types of cold wallets:
- Paper wallet – this is a type of cold cryptocurrency wallet that allows you to store your cryptos on a piece of paper.
- Hardware wallet – this form of cryptocurrency wallet gets used to store private keys on a hardware device like USB devices or hard drives
- Software wallet – this form of cryptocurrency wallet can get used to store both public and private keys in an offline computer system or even on mobile devices such as phones and tablets.
Start Small and Keep Your Private Keys Safe
Start small. This rule applies to all kinds of investing, but it’s particularly important when investing in cryptocurrencies. The smaller the investment, the easier it is to store in a safe place. It also helps reduce your risk if you start with modest investments and build up over time.
Keep your private keys safe. If someone gets their hands on your private keys, they can steal your money. It’s like giving a thief your login credentials for a bank account—you’re giving them permission access to spend your money however they want. You’ve got two options at this point: get cold storage or hot storage.
- What information are you giving this exchange/wallet?
- How will they use that information?
- How will they protect it?
- Will they keep it safe or share it with others?
- Will they sell it?
- What are the consequences of a breach at this exchange/wallet?
Never Reuse Login Credentials
The easiest and most convenient way to reuse your passwords is by having the same password for all of your accounts. So, don’t do this.
Instead, use a good password manager that generates strong passwords and stores them securely. With a good password generator, you can be sure that you’re using a unique, secure password. You won’t have to worry about remembering any of them.
You want your login credentials to be as hard as possible for criminals to crack or guess. It means avoiding common words (especially those found in dictionaries or online).
Maintain High-Security Standards
Here are some security measures you can follow:
- Don’t use a public computer or any computer that doesn’t belong to you.
- Don’t click on links or open attachments of emails that come from an unknown sender.
- Never share your login credentials with anyone, and don’t access your crypto account on public Wi-Fi.
- Never share your private keys. Private keys are meant to be kept private.
Cybersecurity Is Necessary While Buying Cryptos
There are many ways to add an extra layer of security to your crypto holdings. These methods can get implemented in a few simple steps.
- Have a computer that’s not connected to the internet for storing your private keys.
- It’s always better if the two-factor authentication does not happen via SMS but preferably with an authenticator app such as Google Authenticator or Authy, which will generate one-time passwords (OTPs).
- Don’t use public networks for logging into crypto wallets and exchanges unless necessary, as these could pose significant security risks due to weak encryption schemes used by some providers.
If you take all the precautionary measures enumerated above, you will have a much greater chance of protecting your crypto from hackers and other malicious people. Although there is no surefire way to guarantee that your crypto investment is completely safe and secure, following these 10 tips will help you mitigate risks and give you peace of mind.