‘Bitcoin is a remarkable cryptographic achievement, and the ability to create something that is not duplicable in the digital world has tremendous value´ - Eric Schmidt
Cryptocurrencies can be challenging to understand and utilize for some people. Keeping them secure from hacking and other malicious activities is another story. Some people are still reluctant to enter the world of digital assets, fearing them to be another fad in the digital realm. The fear of investing money only in finding out that someone has hacked it is enough to keep half the world away from cryptocurrencies.
Just like any other asset, cryptocurrencies need protection and security. It is imperative to know everything you can about the threats and security of digital assets if you have or are planning to buy one. Since cryptocurrencies have eliminated middleman or third-party organizations to secure assets, you are responsible for guarding your assets.
‘Cryptology represents the future of privacy, and by implication, it also represents the future of money, and the future of banking and finance’ – Orlin Grabbe
Fortunately, security is one of the greatest strengths of blockchain technology, making theft of cryptocurrencies impossible. However, the security is not entirely trickled down to the user, and digital wallets are uniquely at risk. The threat is not from blockchain, but from wallet providers who may track data provided. Information like search history or keystrokes may be of interest to the wallet providers.
‘I understand the political ramifications of cryptocurrencies and I think that government should stay out of them and they should be perfectly legal – Rona Paul
This article sheds light on different methods and precautions to fight security threats to cryptocurrencies, for their maximum utility.
Understanding the Concept of Crypto Wallets
Crypto wallets, also called cryptocurrency wallets, are a collection of wallets. The act as the private key for the holder and allows the creation of public key. The wallet addresses are metamorphosed into QR codes which are shared with others. These QR codes are like your regular bank account numbers used to receive payments. The crypto wallets are accessed via private keys; therefore, the private keys need to be protected at all means.
There are various types of wallets having different security, such as mobile wallets, hardware wallets, desktop wallets, and online wallets. However, a few varieties can store all types of cryptocurrencies; therefore, conduct proper research before getting one.
The threat of hacking comes from different sources. The asset holder may forget or share the private key with someone which may lead to potential losses. Also, emails are used for confirming accounts and resetting passwords. It is important to log out of your account, especially if you use someone else’s device.
However, the most common type of hacking is done by dedicated hackers who identify traders and attack their wallets.
Use More than One Wallet
Ensure that all assets are not stored in a single wallet, instead, spread the assets over a range of wallets. Having a single wallet means the entire holding is at risk, in case of hacking or other market changes.
If not more, have at least two wallets; one for trading and transactions and the other for savings. Cold storage has become increasingly popular as it stores cryptocurrencies in a disconnected platform, to avoid potential hacking. For example, you may write the keys on a notebook or memorize the keys. Hardware wallets are also effective.
Create Complex Passwords
Know that professional hackers have years of experience and can crack your passwords with some efforts. Instead of creating simple passwords, create longer and complex passwords which are difficult to crack.
For example, choosing your wife’s name or hometown as the password is a weak strategy. It may be the first thing a hacker would try. Choose a sentence or a combination of words that are completely unrelated.
Crypto wallets allow up to twenty characters, and you must use them wisely. Avoid dictionary words and do not repeat the letters. It is advised to avoid patterns such as 789, 987, abcd, qwerty or similar codes.
A strong password is a combination of letters, numbers, capital letters, characters, and spaces.
Use Multi-Factor Authentication
Using multi-factor authentication provides an extra layer of protection. When signing in, the account will ask to verify if it is you, and not the hacker. This may include answering a secret question, entering the code sent to your mobile phone, or any other method. It will also warn you if someone is trying to access your account.
Two-factor authentication is readily available on mobile devices and desktops.
Use the Internet Carefully
Keeping digital assets requires a responsible digital behavior. This means that you cannot click on just any website or give your information unless you are sure of the website. Blockchain technology itself is very secure, and there is no internal threat to your cryptocurrency. However, it demands a responsible attitude from the investors, to maintain security.
Hackers use different websites to steal information. Although these websites are active and do not look suspicious, they are maintained to attract you and manipulate you to provide your email address, credit card details, and other data.
Advertisements on the websites can be tricky. Clicking on one can take you to a lethal website; therefore, do not click without thinking twice. Look for https website instead of HTTP, as they are secure.
Also, users feel relieved after downloading anti-virus software. Unfortunately, free anti-virus software does not do the job. The software requires tireless efforts and heavy investment to keep them updated and allow them to detect viruses. Just like you choose the door lock carefully, it’s time to invest in an excellent ant-virus software because now the assets are going digital.
Securing cryptocurrencies is not difficult. However, it will take some time to get hold of the idea of being digitally meticulous. People are careless in handling their gadgets, often share their passwords with friends, and do not realize the potential.
Rameez Ramzan has been a senior digital marketing executive at Cubix, a leading software development company in Washington DC that specialized in blockchain development and software development. With over 6 years of experiences in the software development industry, Rameez is passionate about helping business to increase their branding on the internet.