As the cryptocurrency market is in the midst of a major bullish move as Bitcoin (BTC) approaches peak times, the security concerns of storing cryptocurrencies are becoming more urgent than ever.
On November 12, Bitcoin – the world’s largest cryptocurrency by market value – crossed the $ 16,000 threshold for the first time since the 2017 rally, bringing the price of BTC to $ 20,000. After reaching $ 16,300, Bitcoin has only been above that price for 12 days throughout history.
Since Bitcoin is now at its highest historical level, and the crypto community expects more records in the near future, it is important to remember that the security of cryptocurrency holdings is largely up to the user.
Here are some simple steps to ensure that cryptocurrencies like Bitcoin are safe in this bull market.
1. Use a paper or hardware wallet.
Since Bitcoin mainly allows you to “be your own bank”, the responsibility for storing the cryptocurrency lies largely with the users. A popular expression in the crypto community is “Not your keys, not your Bitcoin”, which means that whoever has the password phrase for a wallet, checks the coins it contains.
Wallets come in many different forms: software, hardware and paper, each with its own security features.
As the name suggests, software wallets are software-based that allow users to access their cryptocurrencies by installing applications on their mobile devices or computers. Thus, software wallets come in different types, such as web wallets, desktop wallets and mobile wallets.
Although software wallets are often free and easy to use, they are not completely secure, as most of them are connected to the Internet in one way or another, which can give them vulnerability to hacker attacks or security breaches. Users must keep their applications up to date to reduce the risk of potential violations.
A paper crypto wallet is actually a piece of paper that contains a printed crypto address and its private key in the form of QR codes generated from paper wallet websites. These codes can be scanned to perform crypto transactions. The paper wallet is very resistant to online hacker attacks and is often seen as an alternative to freeze storage.
A hardware wallet is another sophisticated method of storing cryptocurrencies, isolating users’ private keys from the Internet, and keeping them disconnected on a USB-connected device. A hardware wallet, also called a cold storage or cold wallet, is often associated with an increased level of security, as private keys remain completely autonomous, making them immune to any form of remote hacking. Trezor and Ledger are considered the most popular suppliers of hardware wallets.
2. Check if 2FA confirmation is activated.
Don’t overlook this important extra layer of security by forgetting to enable 2-factor authentication, or 2FA, in your wallet’s security settings. 2FA sends an additional password request to your phone or email every time you log in to your wallet. By activating 2FA, the user prevents the hacker from gaining instant access to the cryptocurrency account, as the hacker will also need physical access to the user’s phone or email.
Google Authenticator is one of the most popular 2FA apps, giving users two-step verification on their phone.
3. Never share your private keys
Never share your private keys or seed phrase with anyone. When you do, you are essentially giving the keys to the lock. Remember that reputable crypto companies will never ask you for keys, even when they are trying to help you solve problems.
4. Make sure the recipient’s wallet is correct.
Always check the recipient’s address before making a transaction. A simple error in one letter can direct the transaction to another wallet. Unlike some traditional financial services, most cryptocurrency transactions are irreversible. Some malware is also capable of changing the correct destination for your cryptocurrency, so cross-checking the details of a transaction is never superfluous.
5. Do not fall for free gift scams.
Never fall for offers that sound like “send us bitcoins and come back twice as much.” This type of attack is quite common on Twitter, with attackers often posing as celebrities, politicians or cryptographic figures, promising to double the user’s cryptocurrency fortune.
Since this type of attack is often associated with newcomers to cryptocurrency, it can become even more vulnerable with the growth of cryptography. In July 2020, online hackers managed to collect at least 12 BTC as a result of high-profile hacking of Twitter accounts such as Elon Musk and 2020 US presidential candidate Joe Biden.
Use smaller transactions and different exchanges.
Do not send a bunch of cryptocurrencies in a transaction if you need to buy or sell cryptocurrencies on a cryptocurrency exchange. If you need to transfer a large sum of money to cryptocurrencies, it is better to divide them into several transactions to ensure that the stock exchange works properly.