Crypto Insights: How To Protect Your Assets Against Threats
Richard Montana | March 15, 2022
While some investors have profited handsomely from investing in crypto assets, the risks are significant. That’s why it’s imperative to learn how to protect digital assets.
Bitcoin and other cryptocurrencies use a blockchain, a digital ledger. Cryptos are decentralized digital currencies that lack a central authority, like a bank, to oversee transactions. Rather, they use a decentralized peer-to-peer exchange network where transactions are verified by miners. Despite its reputation for security, blockchain isn’t invulnerable.
So, how can you secure your crypto investments against security breaches?
Conduct Research On Cryptocurrency Exchange Platform Prior To Investing
Simply put, cryptocurrency exchanges are online marketplaces that allow users to trade cryptocurrencies for other assets, such as digital and fiat currencies. In practice, crypto exchanges work as middlemen between buyers and sellers, charging transaction fees and commissions.
There are as many cryptocurrencies as there are varieties of paper money used globally. If you’re looking for the finest crypto exchange, you’ve probably seen that there are numerous options available online. But, do make sure to choose an exchange that has a tight security. That said, you could check out SWYFTX and other reputable exchanges.
Exchange security, user experience, markets, transparency, legalities, and fees are vital factors to consider when choosing an exchange platform. In saying that, here are a few important security factors:
An exchange’s security is crucial. Non-secure exchanges risk stealing your funds, negating any other benefits. Review the whitepaper of the cryptocurrency exchange platform. This document is aimed to assist you in understanding the crypto’s use applications, capability, and developer’s future intentions. You might also join an online community to gather research ideas and recommendations. Internet searches can also reveal a crypto’s history and credibility.
- Legal Aspects
When it comes to legalities, using a local exchange can help you adhere with regulatory changes. Other exchanges in other countries can also be used, but some has limits. Some exchanges only support a few countries. Some exchanges may ensure their funds, allowing you to be reimbursed if they happen to lose yours.
Transparent platforms also publish their cold storage addresses or help audit their reserves. Some traders dont want to leave funds on any exchange platform for too long. They may only keep funds for trading. Several exchanges are hacker honeypots. Because hackers must hold various digital assets in one place, they design intricate strategies to steal users’ assets. Therefore, many people would say to always keep cryptocurrencies in private wallets.
Use A Hardware Wallet
Using a hardware or cold wallet is comparable to storing your private key cold. It’s a tangible device where cryptocurrency can be stored offline, similar to taking cash from an ATM and storing it in a wallet. This keeps your balance offline and safe against remote withdrawals. But, just like a regular wallet, the device might be stolen and the funds can be lost. When doing this, do make sure to protect your hardware wallet safe.
Don’t Get Phished
Phishing attacks predate the crypto sector. While the primary purpose of phishing is to rob users of free money, tech-savvy hackers are increasingly using it to rob digital assets.
Cryptocurrency phishing scams using harmful advertising and emails are common. Avoid questionable and unknown links when transacting in crypto.
Use Multi-Factor Authentication (MFA)
MFA has been around for a while, with Google Authenticator dominating the market. Other methods of MFA include using a phone number or another device as an authenticator.
Most cryptocurrency exchanges allow customers to log in using their usernames, passwords, and randomly issued authenticator codes. To avoid losing your crypto currency assets to cyber criminals who commonly compromise users’ personal information, including passwords, use MFA.
Remember To Create A Backup Of Your Recovery Codes
This tip about setting up crypto wallets and accounts carefully has a common theme: what if anything doesn’t go as planned? Imagine losing your phone after installing an authenticator app. What will you do if your phone’s app requires a code?
You may have noticed that when setting up a device or online service authentication, you’re instructed to save a limited number of ‘recovery codes. These are supplied as an alternate authentication technique in emergency situations. You can use one of your recovery codes to log in. You shouldn’t be using the same device to run an authenticator app and store its recovery codes.
More codes, really? Yes. After all, if you lose or damage your device, any account service that uses MFA codes will still need to validate your identity. Instead of an app code, a recovery code will do.
The crypto industry may be swamped with opportunities, but income, keys, and cryptocurrencies aren’t secure all the time. Being proactive is one of the best methods to keep your assets as secure as possible. The measures discussed in this article are only the tip of the iceberg; there are several other methods to protect yourself, emphasizing the need to do your own research before going all-in.