Earning through buying and selling cryptocurrency is easy; the challenge lies in not losing what you've accumulated. Unfortunately, the world of cryptocurrency is a tempting target for scammers and fraudsters today. Many owners of digital coins fall victim to their attacks. Don't give them a chance to profit!
Fly-pay.io has prepared 7 crucial tips that minimize the risks of losing virtual currency.
What Threatens Crypto Owners?
The crypto sphere has many avenues for attacks: fraud, deception, extortion, and hacking, to name a few. This is not an exhaustive list of techniques that can lead to a loss of coins.
Crypto owners sometimes resort to paranoid actions. For example, in Switzerland, there is a "cold storage room" in an abandoned military bunker. At a depth of 300 meters, equipment with personal keys of digital coin owners is stored. These are users seeking peace of mind and trusting no one.
However, a significant portion of currency is kept in free storage – in online wallets on trading exchanges. These wallets become targets for hackers. Four years ago, hackers withdrew 740,000 BTC from Mt.Gox, and recently, they "took away" about 120,000 BTC from Bitfinex.
In addition, do not forget about the human factor – forgetfulness and absent-mindedness. One crypto owner accidentally threw away bitcoins worth $9 million. And, of course, threats like fires play a role.
It's time to anticipate all risks and protect yourself! Security instructions have been created by Nick Dodson, the founder of BoardRoom (now GovernX).
His recommendations are somewhat reminiscent of Snowden's level – covering the computer monitor with a blanket or taping the webcam.
But there is a rational kernel here. According to Dodson, security is synonymous with comfort. There is no need to hide cryptocurrency in a bunker if it can be kept secure with simpler yet effective methods.
1. Identify Attack Vectors
When conducting a financial transaction – buying or selling cryptocurrency, pay attention to the «middleman». This is the intermediary who always tries to squeeze in between the two parties in a deal. Of course, this is not a physical person (although this option should not be ruled out), but a fake website or malicious page. They often disguise themselves as popular platforms and target newcomers to the digital sphere.
Before selling or buying cryptocurrency, it is essential to check the addresses of both the transaction site and the intermediary site. Double-check the URL, and if everything matches, proceed. It's even better to bookmark cryptographic platforms and only visit them. Use trusted software and remember to update it.
Hardware wallets should be safeguarded separately. Purchase them directly from the manufacturer.
2. Create Complex Passwords
This means avoiding dates like your birthday, your sister's or mother's birthday, or your bank card. Prohibit using your home address, your mother's maiden name, street names, or lyrics from songs. Pressing random keys is also not a guarantee of success; it's still not random enough. A robot can generate 350 billion password combinations per second. Trust that your version will be among them.
To form strong passwords, you can use a random phrase generator. Alternatively, hardware wallets can generate unique and robust codes for each request.
Don't hesitate to create multiple passwords if required. We also recommend using two-factor authentication. It's suitable for everything: email, cryptocurrency exchange, and trading platforms. The inconvenience of the countdown timer often irritates, but security is paramount!
3. Use «Cold Storage»
Now, we're not talking about a place in a military bunker in Switzerland but about transferring crypto assets to "cold storage" - keeping them offline. Keep only what you are willing to lose in case of a hacker attack in open access on an online wallet. This is a golden rule.
4. Operate with Small Sums
Even if you have a million bitcoins, start financial transactions with small amounts and don't risk your entire fortune right away. The test mode has saved many newcomers before.
Never enter the address manually; there's a wonderful "copy-paste" function that has never let anyone down, unlike accidentally missed letters.
Before a financial transaction, double-check the result with the source. To simplify actions, use Ethereum's name service or QR code scanning.
Verify the target address twice, and before sending coins to your online wallet, ensure the accuracy of the seed phrase.
5. Store Keys on Different Devices
The traditional seed phrase is a sentence of 7 words that forms a private key. This key must be protected! Use both traditional and digital storage devices. Don't think about the past century but write down the key on paper and keep it safe.
6. Conceal Personal Data
In the crypto sphere, there is a concept called plausible deniability – the ability to hide certain information. Don't disclose the amount of crypto on your online wallet or discuss a planned financial transaction in social networks or chats.
7. Guarding the Crypto Ecosystem
The chosen level of security protects not only you but the entire crypto ecosystem.
As Dodson writes, «Be vigilant – and you will succeed».
