“You can’t stop things like Bitcoin. It will be everywhere.”
These words of John McAfee are still not wholly true. But hasn’t Bitcoin survived bans and restrictions in some countries? And isn’t it being used by people in every country today? Nope! El Salvador and the CAR nation aren’t just the anomalies accepting Bitcoin as a legal tender; Bitcoin’s omnipresent wherever digital transactions occur. Its reach isn’t the by-product of regulatory diktats but the financial freedom it accords to the masses against the censored fiat currencies.
We can say, though, that Bitcoin and other cryptocurrencies are yet to gain mass acceptability and a universal charter of regulations due to the lack of adoption. Sure, the growing popularity of cryptocurrencies is attracting more and more investors to jump in every day. But still, many hesitate. Why?
Security risks are one of the top reasons many people have hesitated to invest in cryptocurrency. No doubt, with the growing popularity of crypto transactions, investors see this as a fantastic opportunity. However, this has also attracted hackers, scammers, and criminals who see new investors as easy prey.
Since 2021, cryptocurrency traders have lost over $1 billion in various crypto attacks. But isn’t there a way to protect your cryptocurrency? There is, and today we will discuss how to protect your cryptocurrency investments.
The Justice Department of the United States of America successfully recovered $2.3 million worth of Bitcoin in June 2021. It was paid by Colonial Pipeline to ransomware hackers in April 2021. The story behind the retrieval procedure is quite ironic. The FBI recovered the crypto in a similar way hackers did; they were able to recover the Bitcoin ransom due to the criminals’ unsecured storage of their private keys. But not all attackers will repeat this mistake. Therefore, to protect your crypto investments, you must pay special attention to the security of your crypto wallet.
Why Should You Follow the Digital Security Guide 101?
According to the Federal Trade Commission, nearly $82 million was reported lost to crypto scams between the fourth and first quarters of 2020 and 2021. This is more than ten times the amount from the same period the previous year. Learning how to secure your digital coins effectively is an important step in your crypto journey.
No matter how successful you are at crypto trading, it only takes one mistake for hackers to steal your life savings. Hackers can steal cryptocurrency through various techniques, including stealing or guessing your password, hacking an exchange platform, luring information from you in phishing attempts, and more. But don’t worry, our digital security guide is just what you need to stay one step ahead of hackers.
Tips to Secure Your Crypto
Here are the top 3 strategies that will make it nearly impossible for anyone to steal your crypto funds.
- Use Two-Factor Authentication
You might already be aware of two-factor authentication or 2FA. In the same way social media platforms like Facebook use two-factor authentication to protect your social media accounts, crypto exchanges offer two-factor authentication to protect your crypto wallet. Essentially, two-factor authentication will ask you to input a code from your phone each time you go for a crypto withdrawal.
Without 2FA, you will have to rely only on your email and password to protect your assets. But can you actually trust a mere email ID and password? How many times have you forgotten the password to your email address? Ask yourself, how hard can it be for a pro hacker to crack your email passwords? Not hard at all, right? But even for a pro hacker, getting access to your mobile services will be a hard nut to crack. Therefore, two-factor authentication adds an extra layer of protection to safeguard your crypto assets.
You might worry about your phone dying at a crucial time or not receiving the code on your phone due to network issues. However, with 2FA, you can rest assured that your crypto funds are safe. Even if someone hacks into your crypto wallet, they can do nothing to your funds.
- Put a Strong Password and Use a Password Manager
Many of us have a bad habit of using the same password everywhere. Even worse is the habit of creating passwords that can be easily guessed. You might think keeping your partner’s birthday as the password to your crypto wallet is romantic, but it will be more than a treat to attackers. A 2020 study shows that most people keep birthdays, their own names, and even pets’ names as their passwords. If you want to protect your crypto, it is time to change this habit.
Do not reuse any passwords you already have when choosing a password for your crypto wallet or any other sensitive site. You should also avoid using personal information in your password. The more complicated password you use, the more difficult it will be to crack. It is even harder to crack a password containing capital and lowercase letters, numbers, and special characters.
If you’re worried about forgetting your password, don’t worry. We have a solution for that as well. It is safer to save passwords in a password manager rather than in your browser or somewhere else.
- Take a Hybrid Approach to Digital Wallet
As a crypto investor, you must already know that there are two types of crypto wallets – hot wallets and cold wallets. Hot wallets are the ones that are always connected to the internet as well as the crypto network. These wallets are like your go-to wallets in daily life. You can spend any time you want from these wallets.
On the other hand, cold wallets are technically offline wallets. These wallets are not connected to the internet and the crypto network. You cannot spend with this wallet anytime you want. But, transferring crypto from a cold to a hot wallet requires several steps to be followed.
Let’s say that A, B, and C are all cryptocurrency traders. A, B, and C each use a hot wallet, cold wallet, and hybrid hot-cold wallet. Suppose A’s hot wallet gets compromised as a result of an attack. As a result, part of A’s cryptocurrency investments is lost.
B reads the news and takes a sigh of relief that his investments are safe in his cold wallet. However, B remembers he has to pay his utility bills immediately. But he doesn’t have a way to perform crypto transactions urgently. Since all of his cryptocurrency is kept in the cold wallet, he is unable to access it even in an emergency.
Then comes C. C keeps a minimal amount of his crypto assets in his hot wallet for immediate use and saves most of his assets in a cold wallet. So, as a smart investor, you must be like C. Taking a hybrid approach to your crypto wallet protects most of your assets from cyber-attacks while also allowing you to use your crypto in need.
Conclusion
So there you have it—our top three recommendations for keeping your cryptocurrency secure. However, you must also adhere to a number of other basic security protocols, such as using a reputable cryptocurrency exchange for crypto trading, updating your device regularly, not sharing your passwords with anyone, etc. Clearly, the crypto market is growing by leaps and bounds. The more precautions you take to safeguard your assets, the better you can mitigate the risk of losing everything.