5 excellent practices to protect your crypto from theft
Cryptocurrency is flourishing, and many investors are joining the market in search of great financial opportunities. But the crypto industry isn’t lucrative only for investors – hackers and scammers also take advantage of it to get what they want. While you must avoid different pitfalls when investing in digital currencies, protecting your funds is undoubtedly your top priority.
Hackers stole millions worth of crypto from different popular exchanges in 2021 and 2022 alone, and they’re always looking for opportunities to prey on investors. All these attacks are indeed a concern, which is why you should increase your digital security and store your funds safely. But what’s the right way to do so? Should you use a hardware wallet? Or is keeping it an exchange a better alternative? And what if you forget your password? Should you store a screenshot of it, or is that a terrible idea? Fret not! We’re here to answer all these questions and give tips on avoiding falling victim to cybercriminals.
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Use a robust password
If your password isn’t complex – with capital and lowercase letter, special characters and numbers – hackers can easily access your crypto funds. Even if no password is 100% uncrackable, you can still enhance your level of security by using a combination of lowercase and capital letters, special characters and numbers. Suppose you create a password that would take many years to crack; for practical purposes, hackers would likely give up on trying to hack it.
If you’re worried that you may forget your password by making it complex, the good news is that it’s possible to access your account even if that happens. You can restore your account with a backup of the seed words – random words that your crypto wallet generates when creating it. The process involves uninstalling your wallet, reinstalling it, importing the seed words, and, ultimately, setting a new password.
Store your crypto in a hardware wallet
Using a hardware wallet is one of the most effective ways to keep your crypto safe, as it doesn’t have an Internet connection, meaning it is challenging to get infected with malware. Whenever you make a transaction using a hardware wallet, you must connect it to your computer or phone via Bluetooth or USB. The wallet generates a signature and sends it to your internet-connected device. That way, you can make a transaction without your key being exposed to a potential malware-infected device.
Plus, hardware wallets rely on PIN codes, so it would still be challenging for attackers to access your crypto even if they stole your wallet. However, hardware wallets come with two major disadvantages: cost and inconvenience. Unlike software transactions, hardware wallet transactions take longer to complete.
Moreover, they can be pretty expensive – between $50 and $150. So, if you don’t store a significant amount of crypto, spending your cash on a hardware wallet may not be necessary. However, if you have considerable crypto holding, it’s definitely worth making this investment.
Avoid using a public network
If you need to use the Internet when you’re not home, public Wi-Fi may sound tempting; however, it’s not safe, as it exposes you to threats. People nearby can tell whether you’re accessing a crypto site or checking the bitcoin price today, and sometimes they may even see the transactions you make. This doesn’t necessarily mean you could get your crypto stolen right away.
Still, it makes you a potential target for hackers who may pay more attention to you to determine whether you’re only visiting crypto sites or making high-value transactions. You probably don’t really want that, so avoid using public Wi-Fi, and consider subscribing to a VPN service instead. VPNs can keep your crypto safe from attacks, and their value goes beyond crypto, as you can also use them to stream foreign TV shows and ensure your activity isn’t exposed.
Investors generally use an exchange account when buying crypto for the first time. But hackers can withdraw your crypto to their own wallet address if they access your account. There are two things you can do to prevent this:
- buy your crypto safely;
- turn on 2FA.
Using two-factor authentication may seem inconvenient if you want to withdraw crypto when your phone battery is dead, or you must go to another room to get your phone. However, it also ensures you won’t lose your crypto if hackers access your account. Relying only on your password and email address security doesn’t keep your crypto safe. That’s because hackers can find ways of stealing your password or tricking you into installing malware on your computer via email. However, enabling 2FA adds an extra layer of security, as hackers have to go through many steps to make a withdrawal of your crypto, and that can sometimes be enough to prevent them from completing an attack.
Beware of fake web apps
Attackers use different tactics to get access to investors’ wallets. For instance, they may create a fake website that seems legitimate but has inaccurate spelling. The site can lead to malicious smart contracts, allowing attackers to steal your crypto. It’s a tactic that works just as well as using a fake wallet. To avoid such an attack, you should:
- Use only trustworthy DApps. If you’re good at reading code, you can check the contract addresses in the developer files and look for the block explorer’s code. This allows you to verify if the DApp has any weird functions like ‘admin only’ or ‘owner only’ that could enable the developer to steal your crypto.
- Use a legitimate app website. The official app website is the one that appears first in Google search results. You can verify the URL by checking reputable sources like crypto news sites if you still have doubts.
- Check contract addresses twice. If an ‘approve’ function is required to enable a DApp to use your crypto coins, ensure that the contract address appearing in your wallet is the one from the developer’s documents. Doing this will help you avoid approving a contract designed for malicious purposes.
The bottom line
The crypto market is reaching new highs, but its popularity also increases criminal activity meant to take advantage of new investors. Scammers always develop new tactics for stealing crypto, so it’s essential to use the above practices and protect your funds.