If you bought or mined cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), you are likely responsible for ensuring the safety of your crypto.
Financial institutions will not reverse fraudulent transactions as cryptocurrencies are unregulated in most nations. Therefore, there is a lack of legal alternatives to obtain your lost digital assets. It is unsurprising to hear that cryptocurrencies attract hackers and cybercriminals.
The proof of your possession is retained on a Blockchain-based decentralized ledger. You require to possess a cryptocurrency wallet to purchase and sell tokens, keep track of your balance, and save your private and public keys. The private key is what you are expected to keep secret.
Whenever you store your token with a crypto exchange wallet, they retain your private key.
Hot wallets like the crypto exchange, mobile, and software wallets are connected to the internet which is always being targeted by hackers and cybercriminals. You may access them at any moment, though they represent the highest security risk. In contrast, cold wallets are retained offline. They contain paper wallets and USB drives. They are significantly safer than hot wallets.
Hackers use many methods to target cryptocurrency users and steal their funds.
In the subsequent section, we will provide 10 methods to keep your cryptocurrencies safe from malicious hackers and cybercriminals:
1. Ensure that you download all the latest software and security updates available
In the event that you deploy mobile and software wallets, they typically release punctual updates via security patches to safeguard your digital assets from adversaries.
Moreover, it’s important to remind yourself to download every update made available from security vendors for anti-virus software and the operating system installed on your devices.
More preferably, switch on automatic updates to ensure you don’t miss out on critical security patches. Hackers and cybercriminals are always searching for new opportunities to exploit vulnerabilities in applications, websites, and operating systems. A number of operating systems come with inherent encryption capabilities that you may utilize.
2. Deploy merely secure and reliable wallets
With cryptocurrencies becoming increasingly popular, there has been a substantial increase in the number of cryptocurrency wallets.
Many instances hold remunerative features. Nevertheless, they may include malware designed to steal your sensitive data. Deploy a regulated reputable cryptocurrency exchange that has appropriate measures in place to ensure the security of your digital assets.
A fine online wallet contains the latest security features, holds an active experienced development team, and is compatible with various operating systems. Refrain from employing wallets that don’t grant you full control over your private key.
3. Refrain from using public Wi-Fi networks
It is never a good idea to use public Wi-Fi networks when accessing your exchange account or online wallet. Hackers may readily install malware to track sensitive data being sent through public Wi-Fi networks.
Before you are aware of it, they could get away with your login credentials. Hence, it is vital to solely utilize networks you trust to carry out cryptocurrency transactions. Keep in mind that this security principle applies to all financial transactions, not merely crypto transactions.
4. Deploy two-factor authentication (2FA) or multi-signature wallet
Two-factor authentication (2FA) is one of the most straightforward ways to ensure the security of your cryptocurrencies. 2FA will diminish the opportunities for fraud when conducting crypto transactions. It is identical to the two-factor authentication methods employed by financial institutions.
Whenever you attempt to log in, the 2FA authentication service will dispatch a unique code to your email or mobile phone that you must enter within a given time to access your account.
Nonetheless, we recommend that you deploy a more secure authenticator app such as Google Authenticator or Authy rather than the SMS version.
Furthermore, a multi-signature wallet permits you to provide a trusted individual access to your wallet. You and the individual you’ve provided access to must enter separate passcodes before you may generate a transaction. This could potentially render your cryptocurrencies extremely safe, presuming you have placed confidence into the individual you’ve provided access to.
Additionally, multi-signature wallets are appropriate for companies. Enterprises may require a minimum of two executives to sign off on a transaction to hinder fraud or embezzlement.
5. Utilize strong unique passwords for your online wallet
Utilizing strong, unique passwords for every account is mandatory. Refrain from using weak passwords that may be effortlessly guessed like phone numbers, birth dates, and names.
Utilize complex passwords comprising numbers, symbols, and upper and lowercase letters. According to a 2019 survey, 65% of individuals utilize the same password for several or all accounts. If one of your accounts gets compromised, the hacker may use the same password to access your account on several platforms.
Moreover, ensure you alter your password every couple of months. Alternatively, you may deploy a password manager to generate a strong, unique password.
6. Beware of phishing attempts via emails and websites
Pay special attention to phishing attempts launched by cybercriminals via emails and compromised websites. Make sure you always enter the URL manually and ensure that it employs the HTTPS protocol.
Hackers and cybercriminals always utilize almost identical URLs and clone the whole web interface of cryptocurrency platform websites to appear genuine and steal your sensitive data. Only after you have confirmed these things should you enter your login credentials or private key.
Cryptocurrency phishing emails have become progressively common. Such emails deceive you into visiting particular websites set up by the attackers and further make you believe that the sites are genuine, ultimately resulting in you entering your login credentials.
Subsequently, the attacker uses the username and password they obtained from you to log into your account on the actual cryptocurrency exchange.
7. Store your cryptocurrencies in a cold wallet
Hot wallets get compromised frequently. If you wish to keep your cryptocurrencies safe from financially motivated attackers, utilize a cold wallet to store your private keys.
A cold wallet is not connected to the internet. You could just write down the private key on a piece of paper and store it securely. You may also choose to employ a USB drive or hard drive for this objective.
Numerous cold wallets like USB drives operate smoothly with web interfaces. Once you plug them into your device that is connected to the internet, they prompt you to authenticate the transaction by touching it. This indicates that cybercriminals cannot record your keystrokes to perform malicious activities.
Popular cold wallets include Trezor Model T and Ledger Nano X. You may deploy them to store your tokens in the long-term without needing to worry about attackers stealing your crypto.
8. Back up your private keys and store them in different locations
It is important to make several backups of your private keys and store them in different locations like at home and at the office.
Possessing numerous backups will make sure that your cryptocurrency wallet remains secure even if you lose your private key, or one of the backup devices ends up being corrupted.
In addition, ensure you notify at least one individual you trust where you’ve retained the backup keys. In the event that something happens to you, at least the individual you trust should be able to find your private keys.
9. Conduct small transactions
Generating large transactions may attract hackers and cybercriminals. Cybercriminals are more likely to target individuals with large wallets.
You don’t want to grab their attention. Hence, you should merely conduct small transactions.
10. Abstain from keeping all of your digital assets in one location
In the event that you store your cryptocurrencies in numerous locations, there would merely be minor consequences when something goes wrong with an exchange or wallet.
Ideally, you should possess a minimum of one hot wallet for regular trading and transactions, and two cold wallets for long-term storage of your digital assets.
Given that hot wallets are more vulnerable to being compromised, you should retain merely small quantities in them to maintain your primary savings of cryptocurrency secure in a cold wallet.