You may have seen this article about wealthy investors storing their cryptocurrencies in underground vaults with extreme security. It’s an interesting read and if you have a huge amount invested it may be worth looking into something like this but for most people with moderate investments this will not be cost effective. That doesn’t mean that security shouldn’t be a concern, most people who have been following cryptocurrency news for some time will have seen many horror stories of lost and stolen cryptos. We will discuss some of the things you can do to improve your security.
One of the ideas common in self defense training is to train for the most likely situation. In the case of a currency stored on a computer, the most likely attack on it is going to be through your computer. Lets talk about some ways to make your computer more secure.
Your computer should have an up-to-date antivirus: This is extremely important even if you have never had a virus before and never use an antivirus. Even the largest and most trustworthy websites can be compromised and your security is at a serious risk unless you have some kind of virus protection. There are many high quality antivirus available, some free and some by subscription. There are a number of testing facilities that compare popular antiviruses, one good one is Virus Bulletin.
Keep your operating system up-to-date: It should be noted that versions of Windows older than Windows 7 are no longer being updated. That means that if you are running Windows XP you should be careful not to store any sensitive information on it. If you are running a modern operating system, whether Windows, Mac or Linux, make sure that security updates are being installed in a timely manner.
Be aware of suspicious programs and websites: Be careful with browsing and downloads, while any website can be compromised, the most common sites to distribute malware are old, poorly maintained sites and sites for illegal activities like streaming movies. There are also many fake versions of crypto exchange websites so be very careful to type in the name correctly and never click on links to exchanges from other sites – they can redirect you to fake versions without you realizing it. Best practice is generally to create shortcuts in your web browser and exclusively use them to access exchanges.
Keep your passwords secure: You’ve heard this a million times but I’ll say it again here. Never, ever reuse passwords, especially ones protecting finances. No matter how careful you are, if you are reusing passwords a single site can be compromised and now the hackers have access to all the accounts you have used the password on, and this happens constantly. You should also always use long, difficult to guess passwords. One tip for making an easy to remember but difficult to guess password is to come up with a long phrase and use just a few letters from each word for your password. If you are like most people, though, you will never be able to remember long passwords for all of the many accounts you have at different websites. Some people use a system to have similar but not identical passwords for different accounts so they can remember all of them. A more secure method is to use a password manager. Some people shy away from password managers because if it is hacked all of your passwords will now be accessible to the attacker. While this is true, if you have a very strong password on your password manager, it is much more dangerous to reuse or use weak passwords. The most secure way is to memorize unique difficult to guess passwords but that is beyond most people capabilities.
Use two-factor authentication (2FA): Two-factor authentication or 2FA as it is often abbreviated is the requirement for a confirmation code as well as your password to log into your account. The confirmation code is usually sent to you by various methods after you have entered your password correctly. It is extremely advisable to set it up on all accounts that support it. However, it should be noted that there are some major security issues with 2FA especially when codes are delivered through text. It has been shown to be relatively easy to contact cell phone carriers impersonating a customer and hijack that person’s phone number. You should ideally use a tablet or old phone without a SIM card with a secure email address or Authenticator app for 2FA.
If possible, isolate your cryptocurrencies: Ideally the lions share of your holding should not be connected to the internet at all. One simple way to do this would be to store your wallet information on a laptop with the wifi turned off and only connected to the internet when necessary. Of course, for most people this will require a significant investment so this depends on how much value you are protecting, but if it makes financial sense to you it is not a bad idea. This way there is very little chance of the computer holding your keys being compromised.
Use a hardware wallet: Using a hardware wallet is a very secure way to hold cryptocurrencies. The Trezor and Ledger Nano are two popular versions of hardware wallets. They usually retail for under $100 USD.
Back up your wallet keys: Hard drives can fail, fires and floods happen, computers can be stolen. Millions of dollars of Bitcoin is inaccessible because of lost wallet keys, make sure yours are backed up. Obviously, these key backup can be targeted by malicious parties as well so security precautions should be taken.
Never keep anything on an exchange: Currencies you are actively trading need to be on an exchange but anything you are planning on holding for a substantial amount of time should be moved to a local wallet. Any currency on an exchange can be lost to hackers, to government seizures, and to exit scams.
Watch out for scams: It won’t take long in the crypto space until you see many scams. One common scam is a link to a fake exchange or online wallet. You should avoid following links to things like wallets and exchanges and only enter the address directly or use a bookmark. Even searching the exchange name on Google can result with a fake version of an exchange.
Another very common scam is to offer to send a large amount of currency to you, all you have to do is send a small amount to “Confirm your address.” These “offers” often pretend to be from exchanges or impersonate well known people in the Crypto space like Vitalik Buterin.
Finally, there are fraudulent coins and their good friends, pump-and-dumps. Whether by malicious design or by inept management, there have been and will be many coins that are abandoned without ever fulfilling their promises. Many times their value is intentionally inflated through false news or small groups working together. Then those perpetuating the fraud can cash out at the peak leaving the new buyers with the soon-to-be worthless coin.
Keep a low profile: The best way to avoid being targeted for a robbery is to avoid looking like a valuable and easy target. Anything you do that shows off your wealth can make you more of a target, whether it be an expensive car, jewelry, or your posts on social media. Of course, that’s not to say that you can’t buy that sports car you’ve wanted, but you should be aware that if you are going to be parking it on the street in a sketchy part of town, it may attract unwanted attention.
Lock up: It should go without saying that your backups and sensitive information ideally should be kept in a fireproof safe. Even the most high tech safes can be easily foiled if they can be picked and taken to a safecracker. Even a large heavy safe can be picked up with a dolly and loaded in a truck, you will want to have your safe bolted down securely.
Self-Defense: If you are considering purchasing a weapon for self defense be sure to check fully into the laws of your region. In the United States firearm laws vary from state-to-state and some cities have their own laws as well. In most states you need a permit to carry a weapon concealed on your person. Also be aware that firearms are not as easy to use as they may appear to be. If you are considering purchasing a firearm you will need to be prepared to fire at least 500-1,000 rounds to gain proficiency. If you do not have experience with firearms you will want to train with an experienced shooter, there are many programs available at local ranges. To avoid injury to yourself and others it is vitally important that you are comfortable with your weapon before you begin carrying it.