Protecting Your Crypto in 2023 - Cryptocurrencyinsurance.io
Cryptocurrencyinsurance.io offers the best personal crypto insurance. Cryptocurrency has become a preferred investment choice for many of us, and a lot of investors are buying crypto for the first time. While investors see this as a great opportunity, so do hackers, scammers, and other criminals who try to target these new investors as easy prey. While there are some pitfalls of crypto investing to avoid, keeping your funds safe is certainly of high importance.
The cryptocurrency exchange Liquid was hacked in August 2021, losing over $97 million worth of crypto. In January 2022, another $30 million in Bitcoin and Ethereum was stolen from North American exchange Crypto.com. And FTX crypto exchange filed for bankruptcy in December of 2022.
With all these risks and attacks faced by crypto investors, you may wonder how you can protect your digital security and make sure your crypto assets don’t get stolen. Should you keep your crypto in an exchange? What about using a hardware wallet? Should you store a screenshot of your password in case you forget it?
Secure Ways to Protect Your Crypto Assets in 2023
Cryptocurrency Insurance is the best way to protect your cryptocurrency. We’ll provide all the information you need to choose the best crypto insurance company, and also provide answers to all the above questions and more. We’ll also describe tactics used by hackers and scammers to steal your crypto. Finally, we’ll discuss steps you can take to ensure it is difficult and practically impossible to fall victim to a fraudulent crypto scheme.
Of course, no security method is 100 percent effective, and you may choose not to implement some of the methods we highlight if they’re too inconvenient. There are also quite a few legal risks of crypto investing to consider, but in this article we’ll provide all the information you need to buy and sell crypto as safely as possible.
Let’s jump right in and discuss some ways you can protect your crypto from loss and digital theft.
Get Crypto Insurance to Insure Your Crypto Assets
Cryptocurrency Insurance is a professional contract/agreement in which a crypto insurance company provides a guarantee of compensation for specified loss, damage, scam, or theft of our cryptocurrencies and digital assets in return for payment of a premium. Cryptocurrencyinsurance.io offers unique technology that protects all digital assets for crypto companies and individual investors. Crypto scammers stole over $14 billion in 2021.
Cryptocurrencyinsurance.io protects us and our cryptocurrencies/digital assets from these kinds of losses. Cryptocurrency insurers that provide crypto coverage protect themselves by writing low limits with high rates. Decentralized Finance (DeFi) Insurance for Crypto. DeFi for cryptocurrency is also known as smart contract insurance because it covers smart contract failure. Since FDIC does not insure crypto exchanges or cover cryptocurrency, let us find out the best way to insure our cryptocurrencies.
Use Two-Factor Authentication for Your Exchange
Another easy thing you can do to help prevent unwanted attacks and protect your crypto assets is to first make sure you purchase your crypto safely, and then turn on two-factor authentication (2FA) for withdrawals in your exchange app. 2FA requires you to input a code from your phone every time you make a crypto withdrawal.
It can be a nuisance if your phone’s battery has died or if you have to get your phone from another room when you want to withdraw, but it could also save you from losing your crypto if an attacker gets access to your account. If you don’t have 2FA enabled, you have to rely entirely on the security of your email address and password to protect your crypto. These can be pretty easy for bad actors to circumvent.
Use an Authenticator App
If you use an authenticator app such as Google Authenticator for your 2FA, then your exchange account can be even more secure. Authenticator apps don’t use SMS text messaging to send you the withdrawal code, which means the attacker still can’t get your withdrawal code even if they transfer your phone service to themselves or mirror your messages. If you use an authenticator app, then the hacker would need to get possession of your phone to get the 2FA code. That’s a much stronger layer of defense than using SMS.
Even if you have 2FA enabled, an attacker may be able to bypass the security of the exchange itself. In this case, you could lose your crypto through no fault of your own. If you use an authenticator app such as Google Authenticator for your 2FA, then your exchange account can be even more secure. Authenticator apps don’t use SMS text messaging to send you the withdrawal code, which means the attacker still can’t get your withdrawal code even if they transfer your phone service to themselves or mirror your messages.
Withdraw Your Crypto
Exchanges often have millions of dollars’ worth of crypto stored in them. With that much loot available, they make enticing targets for scammers everywhere. One way to avoid this potentially devastating threat is to just withdraw your cryptocurrency from the exchange. To withdraw your crypto, you’ll need to download a wallet and set it up on your PC.
You will then instruct your exchange to send your crypto to your new wallet address. Once you’ve done this, an attacker can no longer steal your crypto by gaining access to your exchange account or hacking the exchange itself. Instead, the attacker would effectively need to compromise your PC to get your crypto.
Use a Strong Password to Protect Your Crypto
More on this in our guide to staying safe with crypto keys and passwords, but let’s take a 30,000-foot view. If your device is infected with malware, then the attacker shouldn’t be able to read your key vault file and get your seed words. That’s because (hopefully) no one knows your password except you.
But an attacker may be able to use Hashcat’s password-recovery tool or other hash-cracking software to guess thousands of random characters until the vault is successfully decrypted. Whether they can do this cheaply and quickly depends on how complex your password is. The longer the password, the more difficult it is to crack.
Use a Hardware Wallet If Possible
One of the best ways to protect your crypto is to use a hardware wallet, a USB device that can store your key vault. It is designed so your seed words cannot be moved out of the device unencrypted. A hardware wallet has no Internet connection, so it’s extremely difficult for an attacker to infect it with malware.
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Each time you do a transaction with a hardware wallet, you have to connect it to your PC or mobile device through USB or Bluetooth. A signature is produced from within the wallet and sent to your internet-connected device, which allows you to do transactions without exposing your key to a possibly malware-infected device.
Withdraw Your Crypto
Exchanges often have millions of dollars’ worth of crypto stored in them. With that much loot available, they make enticing targets for scammers everywhere. One way to avoid this potentially devastating threat is to just withdraw your cryptocurrency from the exchange.
To withdraw your crypto, you’ll need to download a wallet and set it up on your PC, then instruct your exchange to send your crypto to your new wallet address. Once you’ve done this, an attacker can no longer steal your crypto by gaining access to your exchange account or hacking the exchange itself.
Back Up Your Seed Words Properly
Let’s say you’ve downloaded wallet software and started setting it up. You’re immediately confronted with what may be an unfamiliar experience: You’re told to back up your seed words. If you’re new to crypto and also in a hurry, then you may be tempted to skip this step or just take a screenshot to use as a backup.
But there are good reasons to be careful with how you store your seed words. If you don’t back up your seed words, you will lose access to all your cryptocurrency the moment your device crashes. PCs have moving parts that wear out over time, so, eventually, your device will crash.
Properly Use a Different Password for Your Wallet
You may be tempted to use a wallet password that is the same as one you use for a website, but there are several reasons to use a unique password for your wallet. First, if a hacker breaches a popular website you use, then they may be able to get your password hash and run cracking software on it.
That’s more likely to happen to a popular website (like the Facebook breach last year) than it is to your own device. Second, many people store their website passwords in plaintext inside their browsers.
Check the URL (Avoid Fake Software)
Aside from hacking an exchange, probably the most common scam used to steal crypto is to convince a person to download a fake wallet or use a fake application.Many scammers, for example, will offer fake versions of the popular Ethereum wallet, MetaMask. They’ll even advertise these fake wallets on Facebook or Google.
The best way to avoid this type of scam is to only download a wallet from the developer’s official website, which means avoiding click-through advertisements on search engines or social media sites.
Fake Web Apps
Wallets aren’t the only type of crypto software scam. An attacker can also create a fake website that looks just like a legitimate one but has a slightly different spelling in its URL. The site may lead to different smart contracts from the legitimate one, and these smart contracts may be malicious.
In most cases, this happens because the malicious “exchange” has a line of code that allows the owner to transfer your tokens to themselves. If you had not approved it to spend your 1Dai, then the 1Dai contract would have blocked the transaction. Because you made the approval, the token contract allowed the malicious Dapp to steal your tokens.
Conclusion: Best Way to Protect Your Crypto In 2023 Using Crypto Insurance
Cryptocurrencyinsurance.io offers you the best and most secure way to protect your cryptocurrencies in 2023. The crypto market continues to hit new highs as more people download wallets and join networks for the first time, but this rise in activity also leads to an increase in criminals who seek to take advantage of the new entrants.
We’ve gone over numerous ways you can protect your crypto against this new breed of criminal, including using 2FA, withdrawing from an exchange, backing up your seed words, avoiding open public Wi-Fi, and using a VPN.
In the future, scammers will likely come up with even more ways to steal crypto, and we’ll update this page as new threats arise. In the meantime, these are some of the most effective ways to protect your crypto.
Looking for more crypto information? Check out our guide titled: “What is Crypto Insurance? Crypto Insurance Explained.” There you’ll find a wealth of information to help you better understand and stay safe in the interesting world of cryptocurrency and the opportunities it offers. Get the best crypto insurance today with Cryptocurrencyinsurance.io.
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