How to secure your cryptocurrency wallets – when cryptocurrency made an appearance in 2008, Satoshi Nakamoto published a white paper with the title-Bitcoin: A Peer-to-Peer Electronic Cash System. The white paper described in detail the blockchain network’s functionality. From that time onwards, cryptocurrencies have kept growing. However, storing and trading cryptocurrency comes with risks such as:
- Bogus ICOs
ICOs or Initial Coin Offerings are among startups’ methods to raise money for their businesses without involving any legal body. Crypto-based companies use Airdrops to create communities that serve as platforms where individuals receive gifts for liking or sharing items on social media. Some of these ICOs are unfortunately fake, and thousands end up losing their coins.
- Fake exchanges and wallets
A crypto exchange is a platform where users can digitally buy and sell cryptocurrencies. A crypto-wallet is a purse for storing digital assets such as Ethereum or Bitcoin. An exchange matches varying bids and asks from different users. Fake exchanges and wallets steal from users the coins they deposit.
How secure your cryptocurrency wallets
You can secure your crypto-wallet by doing a few things, such as:
- 1. Using a VPN
Bitcoin, Ethereum, and other cryptocurrencies are pseudonymous, but not anonymous. This makes it easy for anyone to track your activities since all the transactions are stored on a public ledger, meaning you leave your IP footprint in all cryptocurrency exchanges and ISPs. Download a VPN app to enhance anonymity and security. A major function of VPNs is to hide your IP address while securing your data through an encrypted tunnel.
- 2. Keeping private key and recovery phrase secure
Secure your private key and recovery phrase by splitting them into two and storing them apart in separate locations. This means that if hackers were to find one phrase, they would have to gain access to the other one to access your funds.
- 3. Strong passwords
Alphanumeric passwords will protect your crypto wallet by the combination of special characters and upper and lowercase letters.
- 4. Using cold storage
Cryptocurrency hardware wallets are also called cold storage and are used to store coins and other assets. Hardware wallets are now rampant in cryptocurrency circles by individuals who need offline security for their funds.
- 5. Disabling auto-updates
Disable auto-updates on your crypto apps to secure your funds. Please do not update the app immediately after the update in case it develops bugs. Wait a few days, read reviews, then update the app.
In a few years, most establishments and businesses will accept cryptocurrency. This means the risks will go up, but you can use these methods to secure your funds and prevent fraud.
Mathieu is a Information technology professional with over 15 years of experience. He started one of the first bitcoin blogs existed in 2010. He started writing about, investing in bitcoin and promoting the first cryptocurrency when only a few technological savvy people knew about it. Mathieu is a world traveler who enjoys culture, technology, finance, salmon, rice and beans. He’s cool, collected and knows a great deal about blockchain technology.