10 Tips for Safely Buying and Storing Bitcoin in 2018Date Written: December 29 2017 Written By: George Miller
Whether you are new to Bitcoin or were introduced to digital currencies years ago, understanding good security practices is very important for ensuring you do not end up like the thousands of cryptocurrency holders who have lost funds due to hackers. In reality, most of the hacks that have occurred in the past were preventable.
Using the following 10 steps, you can dramatically reduce the chance of your hard earned cryptocurrency from being stolen in 2018 and beyond.
1. Use Two-Factor Authentication
Up first on the list – and for good reason – is using two-step authentication both in the exchanges and wallets you utilize. This will greatly improve the security of the accounts you use to store and trade cryptocurrencies. Most exchanges and wallet services have this feature built in, and it includes new passwords that you use after logging in to further verify each transaction you engage in.
Downloading Authy or Google Authenticator will force you to put in new codes every time you go into your exchange or wallet accounts. These codes regenerate every 30 seconds, so even if your passwords are stolen they will be different thirty seconds later. This type of authentication also protects withdrawals and payments, ensuring that you are the one behind the screen engaging in these transactions through your account. Without this mode of security, all a hacker needs is your username and password, an easy hack for even the garden-variety hackers of today’s day and age.
2. Use a Cold-Storage Wallet
A cold storage wallet is a separate hardware wallet that comes in the form of a USB drive. These wallets store your crypto holdings and passkeys completely separate from the internet or any blockchain, removing any chance of losing your funds. These types of storage are great for storing your personal savings and spreading out the distribution of your crypto wealth.
These wallets provide safe storage of your keys and your holdings, and can even provide you with free exchange services such as Shapeshift to safely swap between your liquid assets.
3. Use Coinbase Desktop Portal
For most newcomers, Coinbase is the one-stop Bitcoin shop. It is the easiest and most user friendly API available that is easy to onboard new users into the cryptocurrency realm. When you use the desktop app compared to the mobile app, you are able to engage in more secure activity and provide more information to protect your holdings.
On the mobile version, hackers can more easily trace your activity and strike when you are most vulnerable, especially if you don’t have malware protocols installed onto your smartphone. Coinbase is a great option for newcomers, but it is recommended to use the desktop app and send your Coinbase Bitcoin to a separate, more secure wallet once purchased.
4. Password-Encrypt Your Passwords
While this may seem redundant, storing your passwords and addresses into a file and encrypting is the best way to ensure your funds remain in your control. Hackers are tricky, and have employed means such as finding your passwords after following your activity for weeks. If you keep returning to the same place for your passwords, there is a good chance they will find it.
Use programs such as VeraCrypt to encrypt your password files and keep them 100% secure. You will notice that when dealing with cryptocurrency and setting up wallets such as Mist, Coinbase, Jaxx, and your hardware wallet, there are alot of passwords to keep track of. If you lose track of just one of these, there is a good chance a hacker will notice and take advantage.
5. Protect Your Mobile SIM Information
Hackers have grown fond of gaining access to mobile phone users’ sim cards and using them to gain access to your sensitive information. Using a PIN protected phone number is a good method to gain added protection against this offense. Also, Gmail offers a feature called Gmail Advanced Protection that will limit any type of third party access to your information during your time surfing the web and using other applications. In general, it is best practice to only keep a small amount of spending money in your mobile cryptocurrency wallet and maintain a distribution of your total crypto wealth between multiple addresses.
6. Always Double Check Address You Are Sending To
When sending crypto either between wallets or to another party, always double check the address that you have pasted into the address bar from your wallet or private encrypted file. There has been a series of malware attacks dubbed the CryptoShuffler Malware, and this malware is able to switch the address you copied with their own address before you paste it into the address bar. Since these addresses are so long and unrecognizable, this will usually slip past the unsuspecting eye. Always double check that the address you paste matches the address you copied.
7. The More Wallets, The Better
While this should be taken with a grain of salt, having more than two wallets greatly reduces your chance of being targeted by a hacker. When you are stuck in a routine of sending to the same savings address from a mobile wallet over and over again, hackers can begin to identify this behavior and begin to slowly steal your funds during your transfers.
Wallets like Jaxx and others have 12 word passphrases for further protection, and with each wallet address you can have added security. Spreading your wealth across multiple wallets serves to not make your activity as easily traceable and can help to further protect your sensitive info and activity from thieves.
8. Use a Password Manager
It is critical to make sure that your passwords do not remain stagnant, and that you change your passwords regularly where possible. There are a vast amount of password management services that can help remind you to switch passwords, help you manage these keys, and also ensure that you are using strong phrases and keys.
Password managers can be free or cost a small fee, but are lifesavers when it comes to managing such intensive passwords that relate back to very intensive security measures. The more organized and well-managed your private keys and seed phrases, the more secure your assets.
9. Backup and Encrypt Your Passwords
While this step may seem similar to step four on our list, actually backing up these files to either a portable hard drive or cloud storage platform such as Dropbox further removes your sensitive information from the grid. Cloud storage platforms come with some increased risks due to their centralized storage of information, so further encryption inside these platforms is recommended and easily achieved.
A separate hard drive can store all of your passwords and keys and will not fail due to a system crash or piece of stray malware that slips through your defenses. This method truly removes all doubt from the equations and can give you peace of mind.
10. Use a Good Malware Protector
Relevant to both mobile and desktop uses, a good malware program will keep out even the most ruthless hackers and programs that seek out your private information and holdings. Most malware programs that can protect against crypto hackers will cost money, and this is for good reason.
Efficient and well-run malware protocols require constant updating and monitoring, and free services cannot provide this in-depth service. The Brave browser is a very unique browser within the crypto community in that it is a malware blocker natively, and it also aims to implement its own token economy eventually.
Overall, keeping your passwords and keys organized, your assets spread out, and your malware protection strong are basic practices that will greatly reduce your chance of being victim to the ever growing threat of cryptocurrency hackers.