What security measures should cryptocurrency holders take?
When Satoshi Nakamoto launched Bitcoin, the early investors were very optimistic that, cryptocurrency will be an instant hit based on Satoshi Nakamoto’ white paper. The investors saw a decentralized system that will counter the interference of the centralized financial system.
Cryptocurrency was designed with a decentralized structure and sophisticated encryption that makes it inviolable and unhackable. Unfortunately, the sudden rise in the value has given birth to high tech criminals who have made those expectations to be a mockery. We have cases in the past where the system was completely decimated by series of attacks. From 2016 till date, the industry has recorded 31 attacks from big cryptocurrency exchanges with a staggering $1 billion stolen from two of those affected companies.
If we say, Blockchain is secure, can that be said of other niches like exchanges. Do you know that money invested in any exchange is saved in a central server; you know how vulnerable a centralized server can be.
This issue of security should be an utmost concern to every investor and that’s why some of the measures need to be taken are highlighted in this guide.
Here are the measures;
#Step 1. Use Cryptocurrency wallet you have 100% control.
Cryptocurrency wallet is a digital storage space for holding and managing digital assets. We have many of them such as MyEtherWallet, MetaMask, Cipher,Mist ImToken,Purity and many more including the ones provided by exchanges. With software wallet like MyEtherWallet, you will have total control of your wallet unlike the ones provided by your exchange. In exchange wallet, you’re sharing your wallet information with a third party.
It’s advisable to use wallet you have total control and never share your private key with anyone.
#Step 2. Use Cold Storage
Cold storage is a system for storing digital currency on hardware device. As mentioned about different wallets earlier, we have hot storage system and cold storage system. In hot storage system, the wallet is connected to the internet while the cold storage system is offline.
It’s very hard to hack a digital asset stored in a cold storage, because the hardware isn’t connected to internet. You need to use cold storage system to store your digital currencies.
#Step 3. Use two-factor authentication
The first thing to do when registering for a wallet is to enable two-factor authentication method to secure your account. This technology does not allow account to be accessed by mere using username and password, a 6 codes key sent to the account holder’s mobile device is what grants one access to the account.
With this technology, it’s difficult to hack a cryptocurrency account.
#Step 4. Adopt KYC/AML security standard
KYC stands for “Know Your Customer” while AML stands for “Anti-Money Laundering”. KYC/ and AML help in fraud identification and prevention. With KYC, the account holders are asked to authenticate their account with relevant documents such as government approved IDs, personal photographs and bank statements.
Monitoring of transactions becomes easier with this approach. Don’t deal with any cryptocurrency Company that’s not KYC/AML compliant.
#Step 5. Keep your private key offline.
Keep your private key away from the preying eyes of the public. It should be kept offline to maintain maximum security to your account. Always use strong password of alpha-numerical proportion to confuse the enemies of your digital assets.
#Step 6.Always use a secure internet connection
Most “URLs” are not SSL compliant, stay away from such URLs. Most links you see today are cloned. Verify the authenticity of any link you’re entering your account details.
#Step 7. Backup your digital wallet
Always backup your digital wallets to enable you restore and access your digital assets when you misplace your device. If your device is misplaced and it’s untraceable anywhere, your digital assets are gone.
Disclaimer: This is just a guide and intended to get the public well informed. Whatever you use this information to do is solely at your discretion and we will not be held liable.