Securing your crypto Investments: Best Practices

In the ever-evolving crypto world, the core idea is to create self-sovereignty, which means that a user can act as his own bank. If the funds are secured properly, they will be harder to reach just like in the case of well-guarded bank vaults. If we fail at any step, there is always a risk of someone remotely tapping our digital wallet.

As you begin the journey on the crypto express, it is crucial to learn to secure the digital tokens neatly. It is not just limited to storage! The holders interact with DApps in the DeFi world, therefore one should know how to use these coins safely. Any random DApp or exchange could be a big threat to your assets.

In this lesson, we will unfold the best ways to secure your crypto from scams and threats. 

1. What are the aspects of crypto security?

• Private keys: Consider the private key as a secret password to a digital wallet. It is like a key to the safe which holds money. It is of utmost importance to keep it a secret to protect the funds.
• Public address safety: The public address is like a bank account number which is safe to share so that anyone can send money there, unlike a private key, which cannot be used to take the money out.
• Wallet security: The digital wallet is like a safe for the currency. One should make sure that a strong, unique password is used to keep the funds safe.
• Phishing scams: Always stay careful of the emails or websites which try to look authentic, but are fake in actuality . They are online scams which trick people out of money.
• Two-factor authentication: It is like having two locks on your door. Both the passwords for the first lock and a temporary code for the second lock are important. It makes it very difficult for the hackers to sneak in.
• Backup and recovery phrases: If you ever lose access to your wallet, this phrase is like a spare key or a backup plan. It needs to be kept safely.
• Wallet updates: Just like regular phone updates, wallets need to be updated too to fix the vulnerabilities and include safety.
• Public Wi-Fi: One should avoid using public Wi-fi as someone might eavesdrop. 
• Diversification: It is important to not store all your eggs in the same basket. If one place gets hacked, others remain safe.

2. Why is security important?

The security of crypto is critically important for various reasons:

• Irreversible transfers: The crypto transactions are irreversible. If it is stolen due to security breaches, there is no way to get it back.
• Decentralized nature: There is no central authority to turn to for any help. It is better to be careful beforehand only!
• High valued assets: The value of these assets is substantial and many people have a huge store of these assets. It is important to protect these assets. 
• Privacy concerns: Crypto can offer a degree of privacy, but if the security is compromised, the financial info can be exposed.
• The Growing target for scammers: As the currencies become more valuable, they become an attractive space for criminals. It is very crucial to protect them.
• Phishing scams: The space is loaded with phishing scams and one might fall victim to these. It is important to be aware of them. 
• Personal information leakage: To access some funds, personal info is required. Inadequate security could lead to theft.

3. Wallet security practices

• Always choose a secure wallet through some reputable company. Hardware wallets are considered to be the most secure ones. Software wallets can also be used with strong security features.
• Use a strong password which is unique for protecting the wallets.
• Enable 2FA for the wallet to add an extra layer of security to the wallet.
• Always back the wallet with a recovery phrase, known as a seed phrase. Store this phrase safely, on offline mediums.
• Regular updates in the wallet are required to have the latest security patches and features.
• Use secure networks and avoid public WiFi for transactions.
• Practice cold storage or hardware wallets for long term storage of the assets. Since they are not connected to the internet, they are less susceptible to hacking.
• Never share the private key with anyone, since they are the keys to your safe.
• Double-check the addresses before sending crypto to anyone as the transactions are irreversible.
• Keep yourself aware and educated about the latest security features in the crypto world.

4. Step-by-step guide to secure transactions

• To start with, choose a secure wallet which aligns with your needs. Ensure that it has a strong track record of security.
• Secure the wallet by choosing a strong password for the wallet. Always enable the two-factor authentication (2-FA) for double security.
• Back the wallet by setting up a seed phrase and secure it offline.
• Keep updating the wallet regularly for the latest security updates.
• Always use secure networks for transactions, never use public Wi-Fi.
• Double-check the receiver’s address before sending any crypto.
• Enable transaction confirmation to make sure that every transaction is reviewed and approved before it is sent.
• Monitor the transactions regularly by checking the history.
• Always use a dedicated device for the transactions to minimise the risk of malware.

5. Best storage tips

• Using hardware wallets for long-term storage is good. As it is the offline space for storing crypto, it is secure against online scams.
• Never keep all your crypto in one space. Diversify across different wallets and storage systems.
• Private key security is of utmost importance. Never share them with anyone!
• Use strong passwords and a backup recovery phrase to make the wallet more tamper-proof.
• Secure the physical methods of storage! If you have a paper or a hardware wallet, store it securely in some safe or bank deposit box.
• Use multi-signature wallets to add an extra layer of security to your funds.

6. Advanced security methods

• Use strong security passwords (upper and lower case letters, numbers and special characters) to make the wallet secure.
• Try to buy a hardware wallet with the latest security updates. Do your research!
• Avoid clicking suspicious links and do not download files from unknown senders or sources.
• Ledger Nano X, Trezor Model T, SafePal s1, and CoolWallet pro could be some of the leading cold storage wallets in 2023. Read here to know the top cold wallets in 2023

7. All about the emerging threats

• Rug pulls have been very popular these days! Here, scammers pump up a new project, NFT or coin to get funding. After they get the money, they disappear. The investors are left with valueless digits.
• Man-in-the-middle-attacks are when users log in to a crypto account in a public location, scammers could steal the sensitive information easily. This is done by intercepting WiFi signals on trusted networks if they are in close proximity. Block this attack by using a Virtual private network or VPN.
• Social media trends of scamming people by fraudulent giveaway posts . Often, they use celebrity accounts to promote giveaways to lure people in.
• Fake exchanges have been on the rise! Stick to the known ones and avoid unfamiliar exchanges.

8. Final thoughts

The security of crypto is paramount as it is growing at a very fast pace. Your security is your own responsibility. The crypto landscape is dynamic and threats are evolving with time. It is important to follow the best security practices and stay informed about the latest hacks and scams. It is not a one-time task. Rather, it is a continuous process where one has to be updated to protect digital money efficiently!

9. FAQs