Crypto Wallet Hacks: How to keep your wallets safe?
How to keep your wallets safe?

Crypto Wallet Hacks: How to keep your wallets safe?

For many, the security risks associated with cryptocurrency investments have been too great to warrant taking the plunge. This is especially true given that, as it stands, the onus of protecting one's cryptocurrency holdings rests squarely on the shoulders of the investor. Most governments do not oversee cryptocurrencies like Bitcoin or Ethereum, unlike FDIC-insured bank accounts, so you may be helpless if something goes wrong.

It's up to you to keep your cryptocurrency safe since it's almost impossible to get it back if you lose it or it gets stolen.

Although there is some danger involved with making purchases online, many of the same practices that help you stay safe online will also help you protect your cryptocurrency. Protecting your cryptocurrency wallet requires measures analogous to those taken to protect against fraud in online banking. However, there are several additional measures you may take to safeguard your cryptocurrency holdings.

How frequently are crypto wallets hacked?

The cryptocurrency market is expanding, but so are the risks associated with it. Attackers will have more incentive to target cryptocurrencies as the market grows. A total of about $3 billion has been taken from cryptocurrency exchanges since 2012, and there have been at least a dozen attacks on the industry since the pandemic began in April 2020, with an estimated loss of over $500 million.

There are several methods via which hackers can gain access to your cryptocurrency, such as by guessing or stealing your password, breaking into an exchange platform, or tricking you into divulging sensitive information through phishing. However, the most typical form of attack is the compromise of a crypto wallet's private keys. While it's unlikely that any cryptocurrency can be made completely immune to all threats, there are many steps you can take to safeguard your holdings.

How do you keep cryptocurrencies safe?

These guidelines are not only applicable to your PC but also to your mobile phone, as mobile apps are quickly becoming the most popular tool for managing a crypto wallet.

You should keep your cryptocurrency in a "cold" wallet

Start by keeping your cryptocurrency in a "cold," or hardware, wallet. You should just retain the necessary amount of it online for transactions and move the rest to offline storage. A cold crypto wallet, around the size of a USB drive, stores the private key needed to access the associated cryptocurrency. If you lose your private key, you will not be able to access your cryptocurrency anymore. Two investors, in a recent case, lost access to their hard wallets despite the fact that the value of their holdings had increased by several million dollars. The investors recruited the services of a hardware hacker who broke into their own crypto wallet using physical access and successfully stole $2 million. If you'd prefer not to pay for a hacker, though, it's important to secure your private key from the start properly. You should keep your private key in a secure location, like a fireproof safe or a safety deposit box, and never give it to anyone.

If you keep the majority of your cryptocurrency with an online service, they likely have access to your private key, which means you risk losing your investment in the event of a hack. If you want to mitigate the risks further, you can keep your cryptocurrency in many wallets, each with its own private key. However, this necessitates securing multiple private keys, which introduces further challenges.

In addition to online and cold wallets, software crypto wallets are another choice. Your application wallet on your computer or mobile device may be safe from general malware, but there are malicious programs tailored to steal your credentials.

Use a reputable exchange to buy/sell

Before you put any money into an exchange, you should know that some are safer than others. If you want to make sure your cryptocurrency investment is safe, you should learn which cryptocurrency exchanges have been hacked in the past. A hacked exchange indicates either weak security methods or existing vulnerabilities.

If your cryptocurrency investment is held on an exchange that gets hacked, you may lose your funds because most exchanges are not required by law to protect your funds. For this reason, pick an exchange that strictly enforces TLS/SSL encryption and calls for multi-factor authentication (MFA). Finally, find out if there are any preventative measures in places, such as balance transfer limits and notifications, or the possibility of freezing the account.

Use a password manager and change your passwords on a regular basis.

While it's terrible, it's also safe to anticipate that at some point, all of your passwords will be compromised in today's climate. Password security relies on careful planning, safe storage, and frequent changes. Never use a previously used password for your cryptocurrency wallet or any other secure online resource. Your password also shouldn't reveal any information about you. Password managers like LastPass and 1Password are safer than storing sensitive information on your web browser. Finally, it's recommended that you switch out your password every six months.

Make use of MFA

Multi-factor authentication (MFA) adds an additional layer of protection to your account by requiring not just one but several different forms of authentication proof (such as a password, security token, and/or biometrics). Multi-factor authentication (MFA) is based on the concept of "knowing and having," which means that you are both familiar with and in possession of some additional authentication method (such as a token, push notification, biometrics, etc.).

Setup options for multi-factor authentication (MFA) commonly include text messages (SMS) or push notifications via a 2FA app. In most cases, 2FA is preferable, as an attacker who obtains your SIM card will also obtain the notification. Changing a phone's SIM card is a typical tactic used by hackers to obtain access to a user's account. If you lose your phone, immediately contact your carrier as soon as possible so they can eliminate your old SIM card. In addition, if you suddenly lose access to your phone's data and text/calling capabilities, it is highly possible that you may have been the victim of a SIM switch. SIM card theft can be avoided by having yours locked by your service provider.

Be wary of phishing attempts

In order to steal sensitive information, phishing is a sort of targeted attack in which the attacker may disguise themselves as a trusted source. Never enter your login information for your cryptocurrency exchange unless you know for sure that you are on a legitimate site. Instead of blindly clicking on a link someone sent you, save it to your bookmarks or enter in the URL. Don't believe anyone who contacts you via text, email, or chat and asks for sensitive information. Lastly, before sending any funds, always triple-check the details.

Keep your cryptocurrencies and private/professional life separate

Always keep your cryptocurrency trading accounts and devices separate from your personal and professional lives. Instead of utilizing an account you can lose access to, such as your personal, school, or work account, you should set up a separate email address specifically for your cryptocurrency wallet. You should never use a public or shared computer to access your cryptocurrency wallet, and you should also consider utilizing a separate device, such as a laptop or smartphone, for trading purposes.

Avoid using public Wi-Fi

Don't access your cryptocurrency exchange or accounts over a public network. Also, if you can, connect using a virtual private network (VPN) to conceal your online footprint. You may protect your online privacy and prevent snooping and tracking by using a virtual private network (VPN) on any of your devices. By establishing an encrypted connection between your device and the VPN server, your data and online activities are protected from prying eyes. Further, you should include this into your everyday online safety routine, not only when dealing with cryptocurrencies.

Set up automatic updates

Regardless of the technology you use, it's imperative that you always have the most recent updates installed. Automatic updates can be installed if desired. Verify that your device and all of its software is running on the most recent versions available. Endpoint security, including anti-malware and anti-virus software, is just as crucial.

Be careful not to give out any financial details

Even while it's tempting to boast about your newfound cryptocurrency wealth on social media, doing so is essentially like inviting attackers into your home. Many cryptocurrency traders prefer to remain anonymous for security reasons. You shouldn't share details about your trading, including the exchange you use and your profits or losses, on any public social networking platforms.

Keep up with the most recent threats

Even as new forms of attack emerge, also do new countermeasures. If your cryptocurrency wallet ever becomes insecure, you'll want to be aware of any new attacks or threats immediately. Check out the DigiCert blog once a month for a summary of the latest cybersecurity news.

Conclusion

It may seem like a lot of work, but keeping your Bitcoin safe from hackers is well worth the effort. Keep in mind that the simpler it is for you to access your cryptocurrency wallet, the simpler it is for an attacker to do the same. In addition, every online transaction might be at risk; therefore, following these guidelines will help you secure not only your cryptocurrency wallet but all of your online interactions. Furthermore, the likelihood of recovering lost or stolen cryptocurrency is extremely low; therefore, investing in additional precautionary security is worthwhile.

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