Cryptocurrency Security Basics
As interest in Cryptocurrency increases drastically, so do new scam methods, threats and risks to investors. You can never be too careful, it’s one of those situations where you think it will never happen to you until it does. Being your own bank and having full control over your money comes with great responsibility and we must take extra precautions to ensure our funds are safe because if you lose your funds, no one can help recover them. It’s gone for good.
1) Crypto Wallets – A must have
The most obvious way to prevent a loss of funds is to own a hardware wallet. Simply put, a hardware wallet is a physical wallet that can only be accessed if you have it with you so no online hack can infiltrate it. The top two hardware wallets I will recommend are the Nano Ledger S and Trezor. Do not be deterred by the cost of it because if you were to lose all your funds, you will wish you had invested in one of these.
The downsides to a hardware wallet are that it’s really for mid-long term holds, it would not be wise to constantly transfer money in and out of it due to fees. Also, it doesn’t support the majority of coins, but as time goes by, they will add more support for various coins/tokens. If you decide you do not want to buy a hardware wallet or if the coin you own is not supported, then the next best option is to open an online wallet, each cryptocurrency has it’s own core wallet but there are also wallets that let you hold multiple coins, for e.g Exodus or Jaxx.
Last but not least, be sure to encrypt your wallets and set a very strong password. https://howsecureismypassword.net/
We would recommend using the ENJIN wallet
– You own your private keys
2) Exchanges are not safe storage options
Anything you plan to hold long-term should not be on an exchange. So many things can go wrong and hackers are constantly trying to target exchanges because that’s where the money is at. History shows how possible it is for exchanges to be hacked and for everyone to lose all their money. Also, be sure to not save your private key on your computer. I’d suggest putting it on a USB or writing it down on paper and safely storing it. I also strongly advise you have several copies and if you can — put one in a safety deposit box at the bank
3) DO NOT store your cryptos on any platform you do not own the private keys to.
Private keys are used to sign transactions meaning, if you do not own your private keys, such as on an exchange, you could lose your tokens if the exchange is hacked and your account is targeted. However, if you own your private keys, you cannot be hacked unless you give another person your seed words and password.
4) Never use the same passwords for exchanges.
It can prove to be quite difficult to remember passwords for each different website, wallet, and exchange you use, which is why I would recommend using a password manager. Alternatively, you could write down the email and password on a notebook and keep it safely hidden of course. Make sure to document all of your passwords, make copies, and store them in safe places that cannot be reached by water, humidity, or otherwise eroded through natural exposure.
5) ALWAYS use 2FA (2 Factor Authentication)
This may sound obvious but many just can’t be bothered. Do not be lazy when your money is on the line because if something bad happens, it will be too late. Download either Google Authenticator or Authy on your smartphone. Also be sure to write down the recovery code you get when setting up 2FA. If your phone breaks or you lose it, you must be able to still get passed 2FA, otherwise, you’re screwed. This can be a very frustrating and difficult place to find yourself in. Do NOT allow complacency to get the best of you in this situation.