The advent of cryptocurrencies has revolutionized the financial world. With over 200 million users and more than $1 Trillion market volume, these digital assets have become the new goldmine. As expected, it has also become a high priority for hackers. For this reason, every crypto user must prioritize the cryptosecurity of their assets.
While many have realized the enormous wealth-creation opportunities in the crypto space and are taking advantage of them, a lot do not fully understand the security system of blockchain technology. Due to this lack of proper awareness, many people have incurred considerable losses by making investments due to hype, fear of missing out (FOMO), and buying fraudulent volatile projects that end up in a rug pull.
To ensure the continued growth, appreciation, and viral adoption of crypto assets, it is important for crypto developers and web3 communities to spread the knowledge of cryptosecurity to enable investors to understand the risks involved, and how to secure their digital assets
Cryptosecurity refers to a collection of security protocols used to secure the codes, ciphers, and encryption of digital assets, to prevent theft, interception, decryption, or any other form of fraudulent invasion.
Other reasons for cryptosecurity include
There are many cryptosecurity companies creating infrastructure with which digital asset owners can secure their assets. The end goal of these products is to prevent unwarranted access, transfer, or liquidation of virtual assets from fraudulent characters crawling the web3 space.
Some things you can do to protect your virtual investment are the following:
Your favorite exchange platform will not tell you this, but as long as your assets are on their platform, they have access to it. They have access keys to your funds, so they reserve the right to determine if and when you can withdraw them. Furthermore, you stand the risk of losing your money if hackers penetrate their platform.
Conversely, having the access keys to your funds gives you exclusive power to determine what happens to them. Without these keys, no one can access your assets. Hence, it stays secured for as long as the keys don’t get compromised. This is why you need a hardware wallet.
Hardware wallets are fully decentralized wallets where you can safeguard your virtual tokens. They come with a standard layer of security called access keys that allows you to save your assets outside the internet. Storing your coins in a hardware wallet is the ultimate cryptocurrency security standard for securing assets for a long time, especially if you want to avoid moving them often.
While your password is your first security layer, 2-Factor Authentication is like a whistleblower that gets triggered whenever any device tries to access your funds using your correct password. With 2FA, you will receive an email or text message with secret codes, which must also be inputted correctly to verify that it’s truly you.
Unfortunately, 2FA isn’t flawless. Hackers may use loopholes like sim swap to move passwords and other data stored in your cloud. Your best bet, in this instance, is to use a hardware 2FA where the passwords change within seconds.
Experts will always warn you to use strong passwords which include alphanumerical and special characters. They also advise that you use different passwords across different platforms. All these are good, but what happens when you forget your password?
In 2021, a German programmer lost access to his wallet containing bitcoin worth $220 million because he forgot the password with which he stored his seed phrase. This could happen to anyone, and to forestall it, you have to get a password manager.
Apart from your crypto wallets, your bank apps, social media accounts, and other apps require passwords. Because it isn’t wise to use the same password for everything, many people these days have tens — if not hundreds — of passwords for all their dealings on the internet.
Using a blockchain password manager saves you the trouble of memorizing multiple passwords and the risk of forgetting them.
A VPN provides cryptosecurity in different ways. First, it encrypts your data and hides your digital footprint. It hides your IP address so that no one can trace your activities to your computer. It also allows you to access tokens and assets that are not available in your location.
Unlike what people initially believed, cryptocurrency transactions are not entirely anonymous. In fact, most crypto exchanges require you to do a KYC before you can fully use their platform. Your data may get compromised if hackers overrun these exchanges.
Using a VPN encrypts your data and prevents them from being able to trace your location as long as your VPN has the Kill Switch feature, which takes you offline whenever there’s a suspected privacy breach.
Making transactions on DeFi protocols often requires you to connect your wallet to external platforms to approve smart contracts. It is essential to know that each time you establish these connections, you stand the risk of compromising your wallet and funds.
Connecting a fraudulent DeFi protocol to your wallet may give hackers access to your wallet. To prevent this, cap your spending limit on each contract. Alternatively, transfer the amount you need for that transaction into an empty wallet, and perform the smart contract from there. That way, your main stash stays secure even if things go south.
Many people have lost money from rushing into projects without getting proper education about them. Many others follow social media hypes and invest in projects, only to lose all their money when the developers pull the rug on them.
To avoid falling victim to such scams, you need to always do your own research about every project before you invest. Read the project’s white paper, understand every little detail about it, and decide whether it’s worth your time and money or not. Moreover, join credible communities of web3 experts and enthusiasts who not only provide web3 job opportunities but also share insights that’ll help you to avoid falling prey to fraudsters.
It isn’t wise to access your wallet using a public computer or even your friend’s device. While you may log out quickly after making your transaction, you don’t know if the device has malware. Accessing your assets with a malware-infested device could be as dangerous as texting a hacker your seed phrase.
Paying attention to cryptosecurity will help you secure your assets and protect you from hackers on the internet. While there are many honest web3 companies hiring credible talents to develop legitimate products, there are also scammers crawling the virtual space looking for easy prey. By following the steps that we highlighted above, you can stay a step ahead of them, and continue thriving in the crypto ecosystem.
