To attack crypto exchanges and wallets, cybercriminals use sophisticated tools and strategies. Here are our top ten methods for securing your crypto wallets and reducing your risk of being hacked.
Utilize a cold wallet.
There are two sorts of crypto wallets you must comprehend:
Hot wallets are internet-connected wallets, such as Exodus and MetaMask.
Cold wallets – Wallets that are offline and not linked to the internet, such as a USB drive.
Hot wallets are accessible from anywhere and at any time, but they expose users to a higher risk of data theft and breach. Establishing a cold wallet requires some technical expertise and is deemed safer. However, there is no “forgot your password” option if you lose your offline wallet.
Ledger, the creator of a hardware wallet with the greatest degree of security, is a good example. Your crypto currency’s private keys are kept on a USB stick with advanced security features and many levels of protection.
USE 2-FACTOR (2FA) AUTHENTICATION
2FA gives an extra degree of account protection. When a user attempts to log in, you get a message or email with a verification code. This extra step makes it more difficult for hackers to get access to your account. To get this verification code, they may contact you and attempt to persuade you to provide it.
Never disclose your Two-Factor Authentication (2FA) code, One-Time Password (OTP), or any other secret verification code to anybody. No one from the cryptocurrency exchange will contact you to request your credentials.
Keep your seed phrase in a secure location.
A seed phrase is a collection of twelve to twenty-four random phrases created by a wallet provider like MetaMask. This seed phrase must be typed in the same order as it was received upon registration. Unfortunately, there is no reliable “forgot your password” option. Therefore, if you lose your seed phrase, you will also lose access to your wallet. Keep this seed phrase offline in a secure location. Simply write it on a piece of paper and place it where you would often store your items.
KEEP A STRONG PASSWORD AND REGULARLY CHANGE IT
75% of millennials in the United States use the same password across various devices, according to research. What is the most frequent password, as unbelievable and absurd as it may sound? Indeed, you guessed correctly! It’s 123456. According to independent research conducted by NordVPN, this password topped the list of the 200 most used passwords in the world.
How long does it need to crack? Well, that was quick!
Imagine someone placing all of their hard-earned bitcoin in a wallet with this password. Who is really at fault? On the other side, random passwords are the most difficult passwords to crack, creating a significant obstacle for hackers. However, if you cannot recall them, you must also record them in a secure spot.
Here are some recommendations for establishing a secure password:
- Utilize a mixture of letters, numbers, and special characters
- Use lowercase and capital letters
- Minimum 8 letters
- Randomly produced
Check out our other blog for further advice on password management and how to keep your credentials secure.
KEEP YOUR INVESTMENTS IN MULTIPLE WALLETS
Never put all your eggs in one basket. Imagine you had 2 dozen eggs. Which would be riskier? Placing them all in one basket or splitting them evenly in half?
Suppose the basket falls. All eggs would crack! But what if just one of your two baskets fell?
The same logic applies to the bitcoin trading industry.
Instead of placing all of your NFTs and cryptocurrencies in a single wallet, separate them into at least 2 separate ones. Use a “hot” wallet for daily transactions and a “cold” wallet for long-term storage.
Avoid cryptocurrency-related scams on social media platforms.
Imagine you are viewing a YouTube video on how to earn money trading cryptocurrencies. The content provider is credible in this area and the channel has over 500,000 members. Somewhere in the comments, the channel owner requests that you contact them over WhatsApp/Telegram to quadruple your income by investing with them. You add the number to your contacts after seeing it. You join them without a second thought and get admitted to their “exclusive” Telegram group. You now believe it to be a “life-changing opportunity” for you.
After many days, you transmit $500 worth of Bitcoin, Ethereum, or any other cryptocurrency with the guarantee that you would “get it twice in 24 hours.” After sending the payments, you confirm receipt of the funds through email with the channel’s creator. Unfortunately, you get the response, “Sorry friend, which funds?” I never requested payment.” Your whole world comes to an end. This scenario is an example of prevalent fraud in the cryptocurrency industry.
STAY VIGILANT OF PHISHING ATTACKS
A phishing attack occurs when hackers deceive you into entering your login credentials on a website that seems to be authentic. For instance, you may get an email from your cryptocurrency exchange instructing you to reset your login and password immediately due to a hacked account. However, there is no genuine connection to the such transaction on the webpage. Always verify that the link is HTTPS and leads to the intended website.
In February 2022, the cryptocurrency trading site Wormhole was compromised, resulting in a loss of about $320 million. This demonstrates that regardless of the amount of protection, you should never store cryptocurrencies on an online exchange. You should keep your digital currency in offline and online wallets to limit your risks.
Utilize a protected Internet connection.
Working from home is advantageous. You may now work remotely for businesses while sipping your favorite coffee at a local café. However, there is a catch: public WiFi is not safe and should never be used to do online banking or cryptocurrency transactions. Always use a reputable VPN while connecting to public networks.
CONSTANTLY VERIFY THE RECIPIENT’S WALLET ADDRESS
The wallet address uniquely identifies the sender or recipient of bitcoin. This address is normally between 26 and 35 alphanumeric and special characters long. Before transmitting bitcoin to another wallet, the recipient ID should always be double-checked.
Malicious software is capable of editing and pasting the incorrect wallet address of a hacker. On the blockchain network, a transaction cannot be reversed after it has been completed. Therefore, it is preferable to be safe than sorry.
USE UPDATED ANTIVIRUS PROGRAMS
Numerous antivirus solutions provide exceptional protection against crypto hacking and phishing attacks. To protect your wallets, these applications check every incoming email and alert possible phishing scams. Always purchase licensed versions of antivirus software and maintain their database updates.