A Guide to Security for the Common Crypto Investor

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You must beware! Security is often an overlooked aspect of crypto ownership.

The author is CEO and co-founder of Giottus Cryptocurrency Exchange

Every new age technology has its security challenges in its early years. While blockchain and Bitcoin in particular are not hackable by design, its users can be prone to human error that can hurt their hard-earned investments. Scammers and hackers are often one step ahead of the normal crypto investor. Unlike bank accounts, all crypto wallets (which store or transact in crypto) are untraceable to an individual and hence it is easy for hackers to steal and hide your investments. However, you can mitigate your risks by adhering to certain best practices as well as updating your security knowledge base. This article is an introduction to best practices as they exist today.

Two-factor authentication is essential

Centralized exchanges act as gatekeepers of the crypto world for the majority of investors. Exchanges offer built-in wallets where your purchases are stored. While they offer great convenience, your exchange password is all it takes for a hacker to gain access to your investment. It is ideal to never store your password on a service connected to the Internet (such as by e-mail). In addition, always enable two-factor authentication which requires an SMS PIN code or your biometrics on your phone to access your account.

Do you have cold wallet insurance?

There are global players who store crypto on your behalf with insurance coverage. Some exchanges also offer this functionality by guaranteeing most of their users’ assets in an insured wallet so that any hacking does not affect the majority of assets under management. These parked assets are called cold wallets (i.e. they are no longer an active transactional wallet). It is wise to keep part of your wallet in such wallets or exchanges so that you can be at peace.

Familiarize yourself with rigid wallets over time

Keeping your assets in an exchange is similar to a bank record. Although they are generally safe, they are not directly in your care. In the crypto ecosystem, a few follow a principle called not your keys, not your coins. Essentially, they wonder why any service that is connected to the Internet should have access to your assets. As your crypto wallet reaches significant value, you can purchase something called hardware wallets, a USB drive-like device that basically looks like a locker in your own home. Hardware wallets store your private keys that provide access to your assets. You can lock your hardware wallet via a PIN code or passphrase (which again must be memorized or written on paper and not digitally stored) giving additional strong security to your assets. This is a relatively impractical way to store your crypto assets, although it is generally the safest.

Don’t fall for the usual scams

All of the common rules that apply to you as a bank account holder also apply in the crypto world. A few are 1) Do not encourage anyone to try to contact you as a representative of a stock exchange or agent. 2) Never give out your OTP or other information when not needed. 3) Don’t send your crypto to a wallet that doesn’t belong to you with the promise of better returns in record time.

Always remember the mantra: When in doubt, avoid any action.

Disclaimer:

This article was written by Giottus Cryptocurrency Exchange as part of a paid partnership with The News Minute. Investments in cryptoassets or cryptocurrency are subject to market risks such as volatility and have no guaranteed return. Please do your own research before investing and seek independent legal / financial advice if you are unsure about investments.

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