What Makes An Exchange Extra Secure
Most of the big cryptocurrency exchanges have good security programs. User-level protection such as two-factor authentication is pretty standard. When you activate 2FA, you’ll need to provide additional information whenever you log on, such as a code you receive by SMS.
But users should look for an exchange that will go the extra mile to keep their Bitcoin and other currencies safe. Here are three additional security measures to look for:
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Be Wary Of Ransomware And Phishing
Predicting how a scammer could get hold of your data is difficult, but the golden rule is to never supply more information than what is needed. Phishing emails generally have one purpose: to get the user to download an infected file or to redirect the user to a malicious website. Some scammers will try to impersonate existing, reputable companies. Recently, Hodlnaut warned of scammers impersonating the company.
Crypto ransomware encrypts all or some files on a computer or device, demanding a ransom from the victim in exchange for a decryption key. Some newer variants can also infect shared, networked and cloud drives. The 2017 crypto worm, WannaCry, had the world reeling as it demonstrated how dangerous self-replicating and self-propagating crypto worms can be. The ransomware attack has hit hundreds of thousands of computers worldwide, effectively shutting down over a dozen United Kingdom hospitals.
How To Store Your Crypto
There are two choices for a cryptocurrency investor when it comes to storing their crypto holdings: custodial or non-custodial.
When users store their holdings on a platform like an exchange, that is considered custodial. Users hand over security measures to the exchange.
But when a user holds their funds in a wallet that only they can access, it is non-custodial and free from platform risks.
Both of these methods have their merits and flaws and the best option varies for different types of investors.
Non-custodial is more secure but inefficient, as it takes time to deposit funds in a trading avenue, and a trading opportunity could be missed.
Custodied funds are subject to many more risks, such as hacks, but offer better trading efficiency as funds are stored on an exchange.
As a rule of thumb, long-term holdings should be stored in a non-custodial fashion. But for short-term traders with an open position, keeping it on the exchange is the smarter option.
For non-custodial storage, offline wallets are the safest bet, as they arent connected to the internet and susceptible to hacks. Think of it like cash: online hackers cant touch physical currency notes because they dont exist online.
Hardware and paper wallets are offline storage methods, offering the highest degree of security for self-custodial investors.
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How To Protect Your Crypto Against Theft
One option to safeguard crypto is by storing it in offline hardware. The holder has to ensure that the hardware or paper wallet is safely locked.
Types of walletsAlso read: From biggest to worst, here are some of global crypto theftsHow to protect your cryptos
Choose A Crypto Wallet That Fits Your Needs
What is a Bitcoin wallet? Itâs a specialized electronic device that can be used to store, send, receive, and track digital currencies. You can find different types of crypto wallets online, and itâs essential to choose one that best fits your storage and trading needs. Another critical thing to consider is the digital walletâs provider. Make sure youâre getting one from a reliable and reputable source. Some crypto exchanges, like Paxful, provide users with a secure Bitcoin wallet for freeâcheck it out!
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How To Hold Cryptocurrency Safely
Steps to avoid hacking and phishing .
Welcome to the third guide in a series of four that have been written and produced in partnership with Ledger. These guides will lay out the things you should consider as you enter the world of cryptocurrency investing including how to buy and store your crypto and, importantly, how to safely take action today.
This guide will focus on how to hold your cryptocurrency safely including the best storage solutions and a checklist to avoid common pitfalls. If you missed the first and second parts of this series, check them out below.
Do You Need A Wallet At All
Most exchanges allow you to purchase cryptocurrency right after signing up, and its held in a wallet on the exchange meaning finding an additional wallet is not necessary. But moving it to a hot wallet or more-secure cold storage can offer more security.
In general, experts agree its probably OK to leave your crypto on the exchange if youre using a mainstream exchange like Coinbase and have a relatively small amount of crypto within your broader investment portfolio. So when should you consider using a wallet?
Move it if you cant sleep at night because you think youre going to lose it, says Theresa Morrison, a CFP with the Beckett Collective, a financial planning firm in Tucson, Arizona. Thats an individual thing.
If youre constantly worried about your holding being stolen or exposed to fraud, and more security would give you peace of mind, then a hot or cold wallet might help you feel more secure.
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Practice Safe Cyber Habits
As all of us love a free wi-fi network, it may be tempting to log in wherever we get a chance. However, before you access a network that you are not familiar with, make sure that it is safe. Unsafe and sketchy networks and websites may pose serious risks to any wallet you keep on your phone or computer, and thus to your funds.
It is generally recommended to keep your assets offline. If you must keep a wallet on your smartphone or computer, do make sure it is encrypted and only contains a minimal amount of funds.
- It goes without saying that you should use a non-public email address.
- Never leave your smartphone or computer unattended or lend them to anyone.
- Also make sure you remove all funds from wallets on your devices before having them serviced.
First Line Of Defense: A Secure Password And Device
Using strong passwords to login from a clean smart device or laptop from a secure network is a vital first step in keeping scammers and hackers at bay. This will help to ensure that the users data is not being leaked or logged to the wrong people. A clean device that is not infected with malware or is otherwise security impaired. In addition to using a secure network and uncompromised device, enabling two-factor authentication can help to improve security even more.
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Whats The Best Wallet To Store Cryptocurrency Safely
1:23 min read
Using a hardware wallet sometimes called cold storage is widely accepted as the most secure method for storing cryptocurrency. Its backed by security experts and keeps your private keys offline so your crypto is inaccessible to anyone but the holder of specific access codes.
As youll recall from part two of this series, hardware wallets work by generating a set of private keys, which you ought to keep safely offline. The wallet itself is secured by a 4-to-8-digit PIN and the device will erase after several failed access attempts, preventing physical theft.
Its worth noting that not all hardware wallets are the same. The precise level of security you get from a hardware wallet will depend on its features, so its worth digging into your provider to make sure that youre comfortable with the level of security and control on offer.
A few things to look for in a quality hardware wallet:
Back Up Your Digital Wallet
A backup will allow you to access your wallet in case you lose your device or your device fails. Choose either a different or a safe location for your backup. In case your device is stolen, you can restore access to your wallet with the backup file. As a precautionary measure, you can move the funds to another wallet.
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Choose A Trustworthy Platform To Buy Or Sell Cryptocurrencies
Choosing the most suitable platform for your digital asset transactions is vital to ensure maximum safety and convenience. Once you have decided to get into cryptocurrencies, an integral part of getting set up is researching the best platforms online to find out which is the most suitable for you.
The seemingly infinite number of platforms out there vying for your attention and business may feel overwhelming. However, there are a number of factors that help you narrow down your options.
You want to look for a platform that operates in a safe and regulated environment with an experienced team. The platform should provide sufficient liquidity, reasonable volumes and employ state-of-the-art technology and safety while offering customers an easy-to-use, intuitive interface. You also want the platform of your choice to support fiat currencies as well as cryptocurrencies, so as to provide reliable, international customer support.
Bitpanda is Europeâs most innovative platform for digital assets based in Vienna, Austria for newbies and experienced users alike. The platform offers fast, safe and convenient access to buying and selling digital assets as well as a vast range of payment options. The Bitpanda Global Exchange offers the lowest fees in the industry for professional traders and institutions along with a large number of trading pairs and is available in 54 countries worldwide.
Using The Legitimate Ledger Live App
Ledger Live is a powerful tool to help provide you with the best crypto experience. Along with your Ledger hardware wallet, it enables you with complete control over your own crypto assets like Bitcoin, Ethereum, XRP and 22 more coins as well as over 1500 tokens. You can even stake your Tezos and Tron for passively earning crypto rewards and buy more crypto directly through it.
It is, however, key that you are using the legitimate Ledger Live app.
There are several phishing attempts out there in the world of cryptocurrencies so much so that weve written a dedicated article on it to help arm our users against them. A common phishing scam that we see is a fake Ledger Live app, most notably a fake Chrome extension or fake app for Android. We urge everyone to never interact with these apps and definitely never enter your 24-word recovery phrase into any application. This should only be entered into a legitimate hardware wallet if needed. We also strongly recommend to only get Ledger Live through our website: www.ledger.com
To recap: Always make sure to get Ledger Live through ledger.com. Never enter your 24 words into any device other than a legitimate hardware wallet The real Ledger Live app will never ask you for your recovery phrase Uninstalling an app from your device or removing an account in Ledger Live does not affect your crypto
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If You Want To Keep Your Crypto Safe Your Wallet Needs That Extra Backup
While it’s easy to think that our crypto wallets are designed to be secure, they’re never entirely safe, and so they need to be protected as much as possible. A backup is a great option to ensure you’ll always have access to your crypto funds, come rain or shine. So, give one or more of these methods a go to rest easy, knowing that your funds aren’t going to disappear on you.
What Is A Hot Wallet
A hot wallet can also be called a software wallet. Its a form of digital storage that you can access on your computer or phone, and is connected to the internet. Because of the internet connection, hot wallets are not as secure from hackers as their counterparts cold wallets. Some exchanges will offer a separate hot wallet in addition to letting you keep your crypto in the exchange.
Theyre often connected with an exchange, theyre oftentimes user-friendly, and theyve really opened up the space to a more mainstream market, Nicole DeCicco, founder of CryptoConsultz, a consulting practice for individuals and organizations learning about crypto and blockchain technology told NextAdvisor recently. But theres many risks to keeping your funds online.
Hot wallets can make it easy to transfer crypto back to an exchange to do more trades or to cash out your holding, and they are more secure than keeping your coins in your exchange account. Plus, many are free.
But they still arent an ironclad way to prevent digital attacks. Price is also a consideration here hot wallets are usually free, while cold or hardware wallets generally cost from $50-$200.
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How To Secure A Bitcoin Wallet
Once youve selected your wallet or wallets, there are a few best practices that you can take to protect your cryptocurrency.
What Is A Crypto Wallet
A cryptocurrency wallet is a software program designed to store your public and private keys, send and receive digital currencies, monitor their balance, and interact with various blockchains. You need to have a cryptocurrency wallet to manage your crypto assets and keep them secure.
There are many cryptocurrency wallets out there, but the essential distinction between them is whether they are hot or cold.
– A hot wallet is connected to the internet and can be accessed at any time.
– A cold wallet is not connected to the internet and allows to store your funds offline. You can still receive funds at any time, but no-one can transfer them out.
Hot wallets include all online cloud wallets, most mobile, and software wallets, and exchanges.
Cold wallets are hardware wallets, offline kept paper wallets, USB and offline similar data storage devices, and even physical bearer items such as physical Bitcoins.
Most cryptocurrency holders use both cold and hot wallets. Hot wallets are handy for frequent trading, while cold wallets are better for long-term holding of crypto assets.
But before we explore different wallets, here is a brief reminder of why keeping your digital assets in exchanges is generally not a good idea.
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Avoid Single Points Of Failure And Diversify Risks
In terms of security, any single point of failure or attack is bad. A single point of failure is defined as a component of a system that stops the entire system from working if it fails. This means you should not create one backup but multiple backups , multiple wallets and multiple passwords.
This is where we once again want to repeat the importance of cold storage or hardware wallets. Do not trust anything that has a constant connection to the internet or even a constant connection to your computer. Despite the fact that we just mentioned choosing a trustworthy platform for buying and selling your cryptocurrencies: please trade online but do not store online.
If you trade on an exchange, you do require some funds that stay on the exchange to establish liquidity. However, decide how much you really need for trading versus how much you might want to trade. You donât want all of your crypto holdings sitting in an exchange wallet if said exchange suffers an attack by hackers – just remember Mt. Gox. Even the most reputable exchange may be at risk of being hacked.
Do not trust in anything that has a constant connection to the internet or even a constant connection to your computer.
In conclusion: Use a hardware wallet or better yet, hardware wallets, to store your funds without being connected to the internet to eliminate the risk of losing funds when an exchange is hacked.
Are you ready to buy cryptocurrencies?
How To Keep Your Cryptocurrency Safe
Digital currency is a convenient alternative method of investing and budgeting. However, it requires similar security to online banking to be used safely and effectively. Here are six ways to keep your cryptocurrency safe.
1. Allocate One Device
If possible, you should only use one specific device for your cryptocurrency transactions. Whether that device is a personal computer or a mobile device, you can keep transactions to a minimum, avoid unnecessary security risks and customize your security to be cryptocurrency-specific. If you prefer to use the same model or type of device for all your online activities, be sure to differentiate your devices.
2. Backup Your Data
However, be sure not to keep your cryptocurrency data confined to its designated device. You should back up all your cryptocurrency-related data. No matter the security tools you apply, there is always a risk of a hacker stealing your information. While a physical device being stolen can always be replaced, the same cannot be said for copied or corrupted data. If you keep backup files, then youll have clean data to go back to if anything happens to your device or your main data. You should utilize a non-network storage device, such as an external hard drive because its more secure than cloud storage.
3. Invest in Segmentation
4. Refrain from Using Public Wifi
5. Leverage Multi-factor Authentication
6. Secure Devices and Wallets
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