Note: This post has been written by a WazirX Warrior as a part of the “WazirX Warrior program“.
Cryptocurrency relies upon a peer-to-peer system that can enable anyone to send and receive payments anywhere. Instead of carrying physical money, you can send payment in a hassle-free manner. These payment transactions exist as entries in a public ledger, and you store cryptocurrency in a digital wallet. The transactions are encrypted, and encryption provides the security of the transaction. Sounds good! But how secure is your cryptocurrency investment? Many people jump onto trading cryptocurrency without understanding the necessary security measures. Cryptocurrency is not unhackable. If you expose sensitive information or surrender to various security loopholes, you increase your investment risk quotient.
Here are some security measures which every crypto investor should take:
Select a strong password for your crypto exchange. If your password is not complex enough, you are exposing yourself to the attackers. Don’t use the same password used for other purposes. Change your password periodically.
Two-factor authentication (2FA)
It is always wiser to use Google Authenticator / Authy type software-based authentication system rather than using SMS based authentication. All cryptocurrency exchanges provide the option to enable software-based authentication systems like Google Authenticator / Authy. Please store the authentication key in a safe place. If your exchange login ID/password is compromised by chance, the hackers will find it very difficult to log into your exchange account if you keep 2FA activated.
Don’t click questionable links
Online scams are really rampant nowadays. You may receive numerous suspicious giveaway links through spam emails or social media. When you click them, you’ll be encouraged to disclose confidential information. Avoid opening unsolicited lottery, airdrop, beneficiary, charity emails that ask you to do any kind of cryptocurrency-related activities. Various URL shorteners are used to shorten long links by the scammers. When you see such a link, you can’t understand anything, but it may demand secret information about your wallet when you click.
Use an updated antivirus
The hackers like unprotected devices connected to the internet. Often you can get allured to download malevolent files, and with a single click, you may be tricked before you understand what is happening. Many malware can steal usernames, passwords, browser data, and the contents of cryptocurrency wallets. Always protect your computer with reputed antivirus software. Don’t use any unsolicited free antivirus software. Ensure that your antivirus software is always up to date and scan your computer regularly.
Avoid procrastinating with software updates
Even if your antivirus is updated, your device can get infected with malware if you use outdated operating systems or popular programs. Cybercriminals find it easy to attack such devices. Many programs roll out regular patches, and these prevent a potential data breach.
Be cautious with flash drives
Be very cautious when you insert a flash drive or USB drive into your computer. Any such device can contain malware, and it may infect your computer. Scan any such device with an antivirus before using it. If your computer is infected with malware, you are exposed to terrible risks while trading from that device.
Trading from your smartphone is obviously very convenient, but your mobile device is more prone to be compromised. Trojans are the most prominent mobile threats, and they constitute over 95% of mobile malware. More than 98% of mobile banking attacks target Android devices, generally. When you are going to trade a high amount of assets, don’t compromise with the security measures.
Using public Wi-Fi
Never use any public Wi-Fi network to do any cryptocurrency-related confidential activity. These networks are often not secure, and you may get trapped. A free coffee shop Wi-Fi may also bring a potential hacking attack on your device.
Be cautious with mobile apps
Cryptocurrency related mobile apps are very easy to use, but mobile app stores have countless fake apps. Find out the download link of your desired mobile app from the official website of the creator. Many fake apps copy everything starting from the user interface, logo, and onboarding experience. Copycats are really growing very rapidly. You can lose all your investment if you use the wrong app. While downloading a cryptocurrency-related app from the mobile app store, please check the app’s reviews and ratings.
Second layer security of mobile apps
Maximum cryptocurrency-related mobile apps give you the option to enable second layer security like fingerprint or PIN code. Please enable that. Otherwise, you are going to have a headache in case of a loss of the device.
You need to know how to store your cryptocurrency. You can store your cryptocurrency in your centralized exchange. That is the easiest method, but often people like to store cryptocurrency in their personal wallets. If you are thinking about storing your cryptocurrency for a long-time duration, you should consider storing it with personal wallets. Different types of wallets have different types of security measures.
While you transfer funds, copy the public address carefully. If there is any mistake, you won’t be able to retrieve it. Often you need to include a tag or memo while transferring funds for some coins besides the public address. Be very cautious before transferring funds and go through the transfer screen properly. Double-check the amount before transferring. Some tokens are issued on different blockchains nowadays. For example, a token may get issued by the concerned project team on blockchain X & Y. It is not possible to transfer blockchain X token to blockchain Y address and vice versa.
Handling your keys
When you create a cryptocurrency wallet, you get a private key and a public key. The public key is viewable to the public, but the private key is secret. Store your private key in a secure place. Many wallets provide you with a mnemonic phrase to remember the private key. You can write down the mnemonic phrase on a piece of paper and store it securely. Never expose your private key or mnemonic phrase to anybody. Anybody can steal your fund with that.
Be cautious with DAPP interaction
Many crypto investors use DAPPS or decentralized applications to perform various trading activities. With the recent boom of decentralized finance or DeFi, the popularity of many DAPPs like Uniswap, Yearn. Finance has sky-rocketed. All DAPPs require interaction through Web 3 browsers or customized browser plugins. You need to interact with the DAPPS using your personal wallet and confirm transactions. If you don’t have good ideas about the cited functioning, please avoid this. Start using the DAPPs when you have the proper know-how to use these. There are numerous fake clones of the reputed DAPPs also. Do your own research before spending your hard-earned money.