Investing in crypto requires strong defenses against security breaches. These tactics can help keep your funds safe.
As of 2022, one in five Americans has invested in or traded some form of cryptocurrency. Popular coins like Bitcoin are increasingly finding their way into mainstream payment methods accepted at everyday stores, both online and in the material world. Crypto seems to grow in both value and popularity year after year, which means it can make a great investment.
However, those who are new to crypto need to make sure they are taking the right steps to protect their coins. These tools and tips will get you started on the right track.
Set Up a Secure Wallet
The first and most important step for securing your crypto is to set up a secure wallet. This is sometimes referred to as “cold storage” for cryptocurrency because it stores your coins completely offline and away from public exchanges.
New crypto investors may make the mistake of thinking that, because crypto transactions are secured with both a private key and a public key, which only works one way, their crypto is safe while stored on the exchange where they purchase or trade it. Unfortunately, this is not the case.
A wallet can be thought of as a virtual, offline vault for your coins or tokens. The most common and secure type, hardware wallets, are like a USB thumb drive protected by your private key. As long as you are the only one with your private key and it is not stored anywhere someone else could access it, your crypto is completely secure in your wallet.
So, your crypto is not stored online, where you are dependent on an exchange’s security infrastructure. It is not stored on any device you might regularly use, either, which could fall victim to any number of cyberattacks.
A wallet keeps your crypto investment quarantined from all of these threats. Just be especially careful not to lose or forget your private key since your crypto will be inaccessible without it.
Protect Your Devices and Data
Protecting your devices and data from cyber threats is not only good for your crypto but also your personal cybersecurity in general. Cybercriminals are taking notice of the rising value of crypto just as much as regular investors and consumers are.
At the same time, cybercrime has been on the rise over recent years. In the first half of 2021 alone, ransomware attacks rose 518%, with an average ransom payment of $570,000 for encrypted data. Similarly, the Anti-Phishing Working Group reported an all-time monthly high in phishing attacks in December 2021, totaling over 316,000 unique attacks.
These threats must be taken seriously. In order to protect your crypto from security breaches, you need to be able to trust that the devices where you are trading, buying, storing, and accessing it are secure. Luckily, protecting your devices and data from cybercrime can be easy and straightforward.
- Make sure you verify that all the software you download and install is trustworthy and keep it updated.
- Install reputable antivirus and anti-malware programs as well and regularly check them for updates and virus scans.
- You may even want to consider encrypting your devices and all of the data stored on them. This way, if anything is stolen or compromised, attackers will have a difficult time accessing your stolen data.
Stay Alert for Security Threats
Even with the best antivirus software and cold storage crypto wallet, you can still fall victim to security breaches if you aren’t careful. Crypto traders and investors need to be aware of security threats that permeate the market. From illegitimate ICOs (initial coin offerings) to simple bragging, there are numerous ways you can put your tokens at risk if you don’t know what to look out for.
1. Exchanges
Start by doing plenty of research before choosing an exchange to trade on. There are many available, but not all of them have the same trustworthy reputation or security features. Try to stick with the most well-established and widely used exchanges, since they are more likely to have reliable cybersecurity. Be wary of any exchange or user that offers to buy your crypto for an unusually high price – it is likely to be a scam.
2. Endorsements and Ads
Fraudulent celebrity endorsements of fake cryptocurrency investments have also become a major problem over recent years. Facebook’s parent company, Meta, is even facing legal action due to the ongoing presence of crypto scam ads on their social media site.
YouTube is dealing with a similar issue with scammers posing as popular content creators:
As a result, it is best to assume that any celebrity endorsement you see online for a crypto investment is fake and not to be trusted.
3. Initial Coin Offerings
ICOs can pose a similar threat. Some initial coin offerings are completely legitimate. However, you need to be careful and do your due diligence before investing. Some ICOs are complete scams, and others, while not outright scams, use shady business practices and make unfounded claims about their coin.
4. Word of Mouth
Finally, while investing in crypto can be exciting, you have to remember to keep your investing details to yourself. Never brag online or to others in public about your latest investment or how much crypto you own. This is a quick and easy way to get targeted by hackers and scammers.
Cybercriminals may send you a phishing email in a batch with a hundred-something other people, hoping they hit on a few folks who own crypto and fall for it. If they know you have cryptocurrency already, though, and how much you have, they can concentrate their hacking efforts on your investment specifically.
Defending Crypto From Security Breaches
Investing in crypto requires a personal investment in smart cybersecurity practices. You can avoid scams, hacks, and other security breaches by taking the right steps to protect both your investment and yourself.
By staying alert for security threats and keeping your cryptocurrency in secure storage, you can invest safely and wisely.