Keeping Your Crypto Safe
- Rebecca C
With cryptocurrency adoption and popularity constantly growing it’s important to know how to keep your crypto safe.
The recent increase in crypto holders, as with any currency, has also led to an increase in hackers who want to steal your digital assets.
One of the biggest issues with hacking is being able to track their work, this is often challenging since their footprints can be eliminated digitally.
When a cryptocurrency account is hacked, the wallet holder does not have any recourse legally to track this. This is because the virtual coins are currently unregulated by a government body or central bank.
“U.K. regulator the Financial Conduct Authority estimates 2.3 million adults now hold crypto assets, up from 1.9 million last year.” (https://www.coindesk.com/uk-regulator-crypto-survey)
With millions of people in the UK getting into the cryptocurrency market, it is vital that we educate ourselves on how to keep our crypto safe. Otherwise, we risk losing our investments.
We have put together 8 tips on How to Keep Your Crypto Safe:
1. Use strong passwords, and enable two-factor authentication. If you want to be extra safe you can add additional authentication by using Google's authenticator app.
Strong passwords should consist of uppercase and lowercase letters, numbers, and symbols, the more characters you have the stronger the password. We would recommend a minimum of 10 characters for a strong password.
Using a random series of letters, numbers and symbols are also advised. You shouldn’t use words that are easily guessable, such as personal information, or using your date of birth.
Example of a weak password: Password123
Example of a strong password: xp2!rw6z$g0
Having 2-factor authentication on top of a strong password such as an email or text code confirmation will help increase the security.
If you use the Google Authenticator app you can link this to your crypto account e.g. on Binance. When you go to log in you will have to go to your app to get a code that refreshes every 30 seconds for added security.
2. Use online and offline storage methods for your crypto. (Ledger - good company/product for offline storage)
Whilst we can put in use strong passwords and additional authentication on our online devices, these can still be hacked or compromised.
Increasing your security by having an offline access device is a wise choice.
A Ledger is a physical or 'cold' storage device for your crypto. If your pc or mobile was compromised having a completely separate device increases your security.
Offline crypto storage cannot be hacked, the only way this can be compromised is if you were to lose it or give it away.
To add a further security step, when you use your Ledger you can set up a pin, so if it was to be lost and someone found it, without the pin they could still not access your wallet.
Similarly to a phishing email or text, fake or scam websites can be created to trap you into giving away personal information or completing transactions. A few signs to look out for are website reviews, are they backed by peers? Does the website have the padlock on the address bar to show it is secure?
If you are ever in doubt of a website that is asking for personal information or financial details, avoid it. The best and easier option is to stick to trusted wallet sites such as Coinbase and Binance.
4. Be aware of email and mobile hackers.
Hackers commonly use phishing attacks to steal peoples personal information and gain access to their private accounts such as banking or crypto ones.
Understanding what phishing emails or texts look like is an important thing to learn.
Firstly, do not trust unrecognised numbers or email addresses. Thanks to modern technology most emails and phone numbers have user identification. For example, a text from HSBC would come through and identify as HSBC.
However, if you get a text from a random mobile or landline number that claims to be your bank in the text it is always best to delete and block them.
Secondly, do not click any links from unrecognized senders! Without even entering any personal information, clicking a phishing link from a hacker could install software or grant them access to your device without you knowing. When in doubt, delete the email or text and do not reply or click on any links.
Finally, any trusted bank or crypto wallet company should never ask you for personal details via email or text. They would also never ask you for a password, so if someone contacts you asking for this, block them and report the number or email address if you can.
5. Never share your passwords or private information. If you have to, ensure it is with someone you trust.
This should be something you practice with all private information, especially passwords or banking and crypto information. Our private information can easily be exploited in the wrong hands, you could even risk losing all your crypto.
As we said in point one, once your crypto is gone it is nearly impossible to trace due to the nature of crypto trading and transactions currently.
So, if you don’t 100% trust someone, do NOT give them your details.
6. When transacting, check you are dealing with a trusted user/wallet, and always check the amount before completing the trade or transaction.
Similarly to a bank transaction you should always thoroughly check the details of the person you are sending money to before you transact.
It should go without saying that you should never send someone your crypto unless you trust them. Once you have sent the transaction you can’t take it back.
Double, even triple-check that you have entered their wallet code correctly. With users’ codes being such a long chain of letters and numbers it could be easy to make an error, always check it over.
If you are sending a large amount, it could be worth doing a test transaction for a smaller amount first to check that it is the right wallet and that they have correctly received it.
If you need to check to be sure, you can search someone’s crypto address and see their history, account balance etc, this can help you check for any red flags with that user. (You can use this website to check this: https://www.blockchain.com/)
7. Avoid investing in scam coins.
This point is less about your account security and more about safe investments. Cryptocurrency is still very new to some people and there are a lot of complicated aspects to it. As well as this there is a minefield of 10,500 cryptocurrencies to choose from!
Many of these could be a scam or s***coins. These are coins that hold no benefit to the market and will usually result in investment loss as well as charging high interest rates making it very difficult to exit with profit.
The best thing you can do is to research the crypto thoroughly before investing. Use a credible website to check its background. A few signs of spam coins could be; mysterious developers where there is little known about the creators, a lack of direction or functionality to the crypto, and a lack of holders.
When in doubt, or if you are new to crypto, stick to the Top 25 cryptocurrencies.
8. Unless you understand cryptocurrency trading and the marketplace, avoid trading with leverage. Or if you are trading this way, do not go over 5x, otherwise, you risk losing your funds entirely.
Similarly to our previous point, this is more about protecting your investments rather than your account.
Brokers like Binance offer the ability to trade leverage on your crypto, anywhere between 2x-50x. The higher the leverage, the more money you are borrowing from the broker. However, the chances of your crypto liquidating increase with a higher leverage.
Leverage trading is very risky because you can lose all of your crypto. It is similar to gambling as it is high stakes and requires a very high-level understanding of mathematics and the leverage process. Leverage should not be entered by beginner crypto holders.
If you do have a higher level of understanding around crypto and leverage we would still advise caution and would not recommend leveraging over 5x.
Putting all these steps together your cryptocurrency account and trading experience should be much safer and better protected.
One final suggestion we have is - putting your crypto into a physical asset is another option.
With crypto being so volatile it can be difficult to follow and may not be the best investment choice for everyone. Exiting and trading your crypto back into your local currency can be subject to tax and additional charges. Therefore, if you chose to spend your crypto on physical assets this could be a good alternative exit.
There are very few marketplaces and companies that accept crypto transactions in the UK. However, one option is AutoCoinCars, the physical value of a car is much more stable than crypto and could be a wiser use of your money/crypto.
With AutoCoinCars, your safety and privacy are important to us.
If you were to purchase a car through us we transact safely from wallet to wallet. We never ask you for more information than necessary.
Plus we always do a test transaction for additional security.
Our live rates are authenticated through verified sources, this way you know that what you are paying is the true market price for your vehicle.
If you are interested in purchasing a car with your cryptocurrency we have hundreds of partnered dealerships across the UK and thousands of approved cars for sale.