I find it ironic that digital assets, like bitcoin and litecoin, are protected by robust cryptographic algorithms, yet so many people don’t make adequate safeguards to secure their cryptocurrencies.
It might be that you mined or bought your coins for fiat years ago when they had very little value, but today you could have a sizeable nest egg. The Bitcoin Pizza Index shows that someone prepared two pizzas for $41 worth of Bitcoins in 2010, and if they still have those coins, they are now worth over $100 million!
Whether you are just starting out with cryptocurrency, or you are looking to secure an existing million-dollar portfolio, please review the following recommendations.
Public and Private Keys
Never publish your private key. If you think it has been compromised, create a new blockchain address and then transfer your funds to the new address as soon as possible. The recommendation is to store your digital assets on either a bespoke hardware wallet like the Trezor and Ledger or use a cold wallet.
A cold wallet is simply your keys in printed text and QR format. Do not store this information online. Print out the details, in duplicate, and keep one copy in a locked safe and the second one in safety deposit box. Be sure to include details of how to access your cryptocurrencies in your will so they can be passed on to your beneficiaries.
Watch Out for Phishing Attacks
A few years ago, it was easy to spot a fake website, but phishing attacks are now very sophisticated. Be very careful which URLs you click and look carefully at every site you visit. Take the time to check the SSL certificate because they’re relatively easy to spoof in your browser.
Hackers continually monitor Twitter feeds so they can insert links to their fake websites in relevant threads. When Binance recently had problems with their servers, a whole host of apologetic Tweets, with links to counterfeit sites, popped up from what appeared to be the CEO of the company.
For a detailed analysis of phishing attacks check out this GlobalSign blog post.
Avoid Simple Mistakes
If an ICO states they don’t accept digital assets from an exchange then don’t try to send them from there – you might lose your assets forever. Don’t type public keys into a website. Use cut and paste or the QR code. If a website has two-factor authentication (2FA) use it, as passwords alone are not secure.
Bitcoins worth several billion dollars are believed to have been lost forever by early adopters that have simply misplaced their private keys.
It might seem overkill to go to so much trouble for a digital asset that is only worth a few thousand dollars today, but if the last few years are anything to go by, you will be glad you did.
You can get plenty more information about securing your digital assets in our friendly Telegram community. See you there!
Financial analyst, smartphone app designer, technical writer, and crypto enthusiast. Blockchain verified graduate of MOOC 9, DFIN-511: Introduction to Digital Currencies, run by the University of Nicosia.