Cryptocurrency wallet security is important for investors in the cryptocurrency market. Regardless of the value of cryptocurrencies , the most important topic is to keep your cryptocurrencies in custody and keep them safe; Because it, like anything else on the Internet, is vulnerable to theft and theft by hackers and hackers. As you know, unlike fiat money markets, the control of digital currencies is decentralized. That is, the absence of a third party such as banks, government organizations, or institutions, in carrying out the transactions requires you to protect the wallet and cryptocurrencies yourself. Protecting cryptocurrencies and securely storing these assets requires skill. In this article, we will talk about how to protect digital currencies and choose a suitable digital wallet
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Digital currency protection methods
The security of cryptocurrencies is greatly increased by some seemingly simple but effective measures, which we will mention below are some of the key points related to cryptocurrency protection:
- Use a strong password
One of the easiest ways to protect cryptocurrency is to choose strong passwords for your digital wallet, email, and cryptocurrency accounts. Hackers and hackers usually use different methods when hacking a password, but the longer and more complex and difficult the password, the more difficult it is for the hackers.
Best way to choose password
A strong password should be long and complex enough. Ideally, it is best to choose a 12-character password and a combination of numbers, English and Arabic letters (uppercase and lowercase letters), and symbols such as @# & *% > $.
Do not use the same password for accounts on different platforms. This makes it more vulnerable to attack from hackers and hackers.
Always log out of your account after making a transaction. This protects the cryptocurrency from being hacked, especially on public wifi networks.
To prevent the possibility of forgetting passwords, you can use a password manager. In this case, there is no need to type the passwords again. Examples of the best password managers are LastPass and Dashlane.
Use two-factor authentication to protect your digital wallet
Two-step authentication is an effective way to increase the security of digital currencies, and most people know it as two-factor authentication or two-step verification. This method is used as an additional security layer in various digital systems. If the two-factor authentication system is enabled, you can only access the requested site or program by passing a few steps of the security check.
Therefore, regardless of the password, when entering the desired platform, a security code is sent to the person via mobile SMS, email, etc., and the platform can only be entered by entering this code. Fortunately, these codes expire after a few minutes, so hackers or hackers cannot use the expired codes and enter the account.
For the security of cryptocurrency and an individual's account, all cryptocurrency exchanges support two-factor authentication. Some exchanges and platforms use SMS on phones or email to send the security code, while some increase the security level and use two-factor authentication software such as Google Authenticator, which is a strong performance authentication and implements two-step verification through an excellent algorithm.
After you set up two-step authentication, you will receive a one-time password to do any of the following:
Log in to the account .
Transfer digital currency to another person .
Change account information .
Complete the withdrawal process .
Digital wallet security
The security of the digital currency depends on the type of your wallet. In general, you can use two types of wallets with or without custody to store cryptocurrencies.
central wallet
Central wallets are wallets controlled by third parties such as brokers and exchanges that hold private keys to protect cryptocurrency.
Safeguarding digital currencies with custodial wallets is an easy-to-use option, but it is not a good idea for long-term storage; So avoid storing your assets in these wallets as much as possible. Among the disadvantages of guard wallets are: Centralized wallets. Meaning it works as a bank and there is control over your money.
You do not have access to your private keys, so you depend on the wallet provider to access your crypto
Large wallets are more prey for hackers, they are expected to be hacked.
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decentralized wallet
Decentralized wallets mean that you keep your private keys without an intermediary. Private keys give you control over the cryptocurrency and no one can access your funds without permission.
You will have a file that stores your private and public keys and your recovery or retrieval keys, which is an ordered sequence of 12 to 24 words. You need to copy and save this phrase correctly and use it to recover your wallet and passwords in case you forget your password or get hacked.
Ways to increase the security of the digital wallet
cold storage wallet
Cryptocurrency security is increased by using cold wallet. Cold wallets are digital wallets that, unlike hot wallets, work without an internet connection. Cold wallets are physical electronic devices designed to store cryptocurrencies offline. Fortunately, hackers cannot remotely access cold wallets and steal your passwords.
During the transaction process, you must first connect the wallet to your computer or smartphone. Cold wallets are usually expensive, but they are a very good and excellent option to protect your cryptocurrency. You should note that as much as cold wallets are a safe way to store digital currencies , in case of loss or theft, the owner of the wallet suffers a lot.
Hardware wallets are the safest type of cold wallet. This type of wallet is similar in appearance to USB, except that it is designed only for storing and maintaining digital currency information. The most popular hardware wallets are Ledger Nano X and Trezor.
Use of multisig digital wallets
Multi-signature wallets are a type of cryptocurrency wallet that requires two or more private keys to enter and send transactions. In the storage method, multiple cryptographic signatures are required to access the wallet.
This method is the most secure way to store and maintain cryptocurrency. Even if the thief manages to hack your wallet, he will not be able to access your assets. Because this access requires the key of other wallets, which is almost impossible.
The security of cryptocurrencies is increased due to the added layer of security that multi-signature wallets provide.
Loss of private and public keys equals loss of digital currency
Cryptocurrency protection is in the security suite of private keys. A private key is a series of numbers that represent the digital currency in your wallet. Primarily, private keys lock crypto assets to a specific blockchain address and give you access to funds; Therefore, if the private key falls into the hands of unknown people, then there will be a chance for hackers to gain full access to your wallet.
Now that the importance of private keys is known, it seems necessary to make backup copies of private keys to protect digital currencies. Or write your keywords down on a piece of paper and keep them in a safe place; But if you somehow not backed up your private key and lost your wallet, you can easily recover the wallet by entering the keywords.
Trade and invest only on reputable and trusted platforms
The security of cryptocurrencies depends on the investment platform. As you know, the cryptocurrency space has expanded rapidly in recent years and new cryptocurrencies and exchanges have entered the market. In the same way, various investment plans are expanding rapidly. Safeguarding cryptocurrencies and identifying a trusted platform is more difficult than ever.
The three types of cryptocurrency scams that you should be aware of are:
The 3 types of cryptocurrency scams you should be aware of
Awareness of fake platforms
There are a lot of fake wallets and exchanges. But to you it seems that the emergence of these platforms is a legal and safe place to trade and store cryptocurrencies. They may offer very attractive rewards and benefits to the user, such as no transaction fees; But as soon as you want to withdraw the money that was saved, you will face many difficulties. These platforms will eventually steal your account.
Before taking any action, it is best to read the reviews and opinions of other users about the requested wallet and exchange and make sure that it is legal.
Stay away from fake investment schemes
To increase the security of cryptocurrencies, it is necessary to pay more attention to investment platforms. There are platforms that have made large-scale advertisements in social media platforms such as, Instagram, and Facebook, and promised to increase the capital two or three times. After investing in these platforms, you are likely to get the first return but there is no guarantee of paying later or it is likely that once you invest in these platforms you will be scammed, so you should stay away from fake investment schemes and you should consider the risks before the results.
Beware of Ponzi Schemes for Cryptocurrency
Ponzi schemes have been around since the past and they are a scam to defraud people. In this plan, people are promised that if they give their assets to a Ponzi designer, the owners of the assets will get a guaranteed profit.
OneCoin is an important example in this paragraph because it was a Ponzi scheme. There is a girl who convinced companies and many people to invest in a new cryptocurrency called OneCoin. According to the FBI, the creator of OneCoin escaped from prison in 2017 and disappeared.
Some important points when choosing a portfolio and exchange in investment platforms are:
Some important points when choosing a portfolio and exchange in investment platforms
False profit claim
In order to secure cryptocurrencies, stay away from platforms that claim unrealistic profits. These platforms exploit your emotions with false claims. But you should always do a thorough and detailed research before taking any action in the field of cryptocurrency. Search for the name of the desired platform with a simple Google search, read the comments and reviews carefully, search for the platform on YouTube, and make sure to watch some videos and take people’s opinions in the comments and the opinions of the YouTuber.
Check platform logs
Another popular feature of illegal platforms is that there is no information about the background of the platform and the team behind these platforms. Although many legal and authorized exchanges do not reveal the names of all the people who work on the platforms, all users still have access to the names of the top managers.
If you do not find the names of the administrators of these platforms, you should proceed with greater caution.
Stay away from unsecured networks like Wifi
The following tip to protect your cryptocurrency is to avoid connecting to public wifi while performing any cryptocurrency related online activities. Always conduct cryptocurrency transactions using a secure and reliable internet network.
In 2017, someone logged into their account just to check the value of their cryptocurrency using a restaurant's public wifi and simply lost $117,000 worth of bitcoins because they had been hacked due to an open vulnerability in the restaurant's public wifi.
As it turns out, logging into the account using public wifi is very dangerous for any activity in the cryptocurrency space. Because hackers easily steal your login details and get into your account; Therefore, in order to increase the security of cryptocurrencies, it is necessary not to log into your account in public places and at times when it is not necessary.
Other important things to protect digital currencies
The security of cryptocurrencies increases significantly by following the mentioned points. Here are some other important measures to protect cryptocurrency:
Avoid suspicious calls, messages and emails
Scammers may claim to have news from popular platforms. For example, one recent phishing scam involved fake emails from a news site called CoinDesk. In this scheme, scammers send a malicious link with an email design similar to Coindesk newsletters, and users enter the fake Coindesk website by entering this link.
After entering this site, the user is asked to pay an amount in digital currency to display ads on the site. Once you pay, hackers gain access to your account and disappear.
Be smart and act wisely
To keep cryptocurrencies safe, don't talk about your cryptocurrencies online and on social media. Because in this case, you will become the prey of hackers, scammers and criminals in your area.
In 2017, the body of Pavel Nyashin, a 23-year-old Russian cryptocurrency investor, was found in his home. Through the police investigation, it was found that this person repeatedly talked about investing in the cryptocurrency market both online and on social media. Soon after, he was killed by masked robbers and $425 stole from his home; Therefore, it is best to always be careful about what you say on the Internet.
Install a good antivirus and check for malware regularly
Hackers are infecting your computer with crypto-mining malware. This malware uses the computer's central processing unit (CPU) or graphics processing unit (GPU) to mine cryptocurrency. Other methods used by hackers include:
Keylogger: With this software, they can potentially control and record all the keys pressed on the keyboard on your mobile phone to get useful information. It is a hidden spyware program that is sent via e-mail, or you download it from an untrusted site, or it is among free programs and you are not aware of it, so you must be careful.
Ransomware: It is malicious software that locks computers and mobile phones and encrypts your files and demands ransom or money to decrypt the files.
Malware: Some malware replaces your wallet address and information with the address of the hacker by hijacking your clipboard (data storage software).
To protect your cryptocurrency and prevent this from happening, delete any relevant suspicious files and scan your system frequently for malware.
Avoid from anyone trying to access your computer remotely
For the sake of cryptocurrency security, never allow anyone to remotely access your mobile phone or computer. Many hacker attacks in the past years were linked to hackers who had remote access to the victim's computer through software. With these advanced tools, once you give access to hackers, they can enter your computer and your accounts and steal passwords so you should be wary of the apps you install on your mobile phone asking for permission.
Usually, this scam is popular among people who present themselves as remote computer repairers and support. They claim that there is malware in your computer and they want you to pay for necessary services and repairs with cryptocurrency.
They may also ask you to troubleshoot your system remotely from their computer by installing remote desktop software. After installing the program and accessing your computer, they will be able to access the cryptocurrency account by performing the following steps.
Avoid phishing sites and verify that the URL is correct
Avoid phishing sites and verify that the URL is correct
To keep your cryptocurrency secure, only visit sites that have a valid HTTPS certificate. Almost all legitimate websites have this certificate. For more security, you can use the "HTTPS Everywhere" browser extension.
Keep your assets separate
Don't keep all your coins in one place to protect your cryptocurrency. The best way is to use one or more cold wallets for long-term currency storage and a hot wallet for transactions.
Use a personal IP address
Use a personal IP address to protect the digital wallet
If you have a static IP address, use that address to increase your security; And make sure that you only have access to your account.
8) Before making a transaction, check the cryptocurrency address several times
Some malware, by modifying the transaction address, transfers the amount to the wrong address, the hacker's address, every time you make a transaction; So make sure the address is correct before making the transaction.
Use appropriate security measures
Some people use a lot of complex security layers to increase the security of their cryptocurrency due to the excessive obsession. Don't forget that you may lose cryptocurrency with some security tools. Today, losing access to accounts, funds, and wallets due to the use of excessive security tools is as common as hacker attacks; Therefore, it is necessary not to overcomplicate your security and maintain a balance.
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Frequently Asked Questions
?What is the reason for using a digital wallet
A digital wallet is used to manage and keep digital currency assets safe, and there are two types of wallets, cold wallet and hot wallet.
? What is the difference between hot and cold wallet
A hot wallet is connected to the Internet and can be accessed at any time, while a cold wallet is a device similar to a USB connection and is used offline.