Being your own bank in a digital world.
This is why we can’t have nice things.
At least, that’s what I tell people who call for stronger regulation and more centralized authorities in the crypto market.
I think the same thing every time I see someone complaining about losing their secret keys, or losing a significant amount of money by mistyping a wallet address. There are countless ways to lose your money in crypto, in the same sense that there are countless ways to earn money in crypto. You can’t have your cake and eat it too. If you want “moon” like gains, then you can’t have the safety and security of a bank looking over your shoulder and holding your hand whenever things get scary.
The risks of investing in this market don’t end there. On top of all the ways you can lose your own money, there are also external forces who will happily take it from you.
Cryptocurrencies and Blockchain are still in a very early stage of development. We’ve seen several incidents where large exchanges and blockchain protocols were hacked, and millions of dollars were stolen. For example, More than $1.7 Million has been stolen in recent mid-may Verge (XVG) hack. The Korean exchange CoinGrail was recently hacked for the tune of $40 million USD. Don’t even get me started on Mt. Gox, that hack sent the market into a bear run that lasted for years. Beyond the larger scale hacks, typically aimed at HoneyPots (a honey pot is a very attractive target for a hacker, usually any centralized source of crypto storage, i.e. an exchange wallet). It’s a lot more appealing to hack an exchange wallet than it is to hack a persons personal wallet.
Watch out for these guys..Image by Samuel Zeller on Unsplash
Token Sales and Initial Coin Offerings are also highly targeted. Scammers are quick to take advantage of founders by reaching out in official telegram groups posing as Twitter and Youtube personalities. They’ll ask for payment in BTC in order to be featured in a video, and if you happen to fall for it, disappear as soon as they have the funds. We have 24/7 community support in the mesmr Telegram channel, and our mods are hard at work banning these scammers on a daily basis. There is no end to the types of scams, and dangers that you face when dealing in this market.
But again, you can’t have your cake and eat it to. The reasons this market has brought life changing returns to early investors is the same reason its’ dangerous.
Lack of central authority.
Instead of complaining about it, my solution is to offer you a quick guide on remaining safe in this space. I hope you enjoy it.
In this desert full of scorpions, how do you find an oasis to store your treasures?
Image by Fabian Struwe on Unsplash
Don’t leave your funds on exchanges
Many exchanges have a large user base, which makes them an extremely attractive target to hackers. Exchanges are “HoneyPots”, like we mentioned before. Hackers mainly focus on major exchanges from which they can steal a huge amount of funds. We have seen cases where most of the leading exchanges were hacked; with the funds of their innocent users stolen. Thus, leaving your funds in these exchanges is simply, a damn stupid thing to do.
If you are a day trader and trade a huge volume in a day, then try to leave a part of your portfolio in exchange and use other safe wallets for your rest funds.
If you’re a long term investor, get the official wallet (or a Nano Ledger S), and secure your damn bags! No reason to leave money you don’t plan on actively trading on an exchange.
Use online and offline wallets
If you are a small trader or investor in crypto space, then online and offline wallets will be a best affordable way to store your coins. You can download official wallets from any cryptocurrency on their respective websites. There are also multi-crypto wallets like Exodus and Enjin which support many cryptocurrencies. Multi-coin wallets are still a HoneyPot in a way, but they are much safer then exchanges.
Use Cold Storage
If you are having a huge portfolio with a couple of Bitcoins value, then using online and offline might not be good for you. Thus using cold wallets will be the best alternative recommended. You can keep your funds on different hard disks. You can also use Hardware wallets like a Ledger Nano S.
Never buy a used Ledger, ever. Also avoid Ledger resellers unless they’re trusted.
I bought my Ledger from Amazon, which some of my more paranoid friends would frown upon. A lot of people suggest only buying these directly from the manufacturer as it’s the only way to ensure your device hasn’t been tampered with and resealed — I personally trust buying from the Ledger Amazon account, but check out their official website if you want to be extra secure.
Never tell anyone about your Income and profits
With the continuously rising value of cryptocurrencies, Criminal activities are also increasing at a very high scale. Another large target for hackers is the network of crypto influencers that has exploded in the past few years. Some of which, like to brain about their gains. Most of those that brag about their gains have been hacked, or scared by attempted hacks enough to change their ways.
Do not reveal anything about your income and profits in front of anyone. As a general rule of thumb, never type your profits/income unless its in a spreadsheet. Treat your profits like swear words.
Do not click on any miscellaneous Emails and link
Many hackers are using phishing techniques to steal funds from innocent investors. One of my friends was hacked and lost thousands of USD worth of NEO, simply by downloading content from an unknown website. Always double check URL’s to ensure you’re at the right site and it’s secure (look for https:// before a URL, the “s” before the colon is important). Never give out your personal information to anyone, no one on Twitter is giving away 100ETH, don’t send your wallet address and email to people with offers that are too good to be true.
If something seems to good to be true, it is, I promise you.
Don’t get caught by a phishing attempt!
Use Unique Passwords and keep them Secret
With new exchanges popping up every week, and over 1600 cryptoassets listed on CoinMarketCap. Chances are, you’re going to need more than one exchange account to access everything you want to invest in. Remember to set different passwords for every exchange, and change them regularly, so that the chances of being hacked will be reduced. You can also use a tool like LastPass to store and scramble your passwords regularly, but that’s trusting a centralized authority with your data — so take that as you will.
The safest way to store passwords is to print them out, delete them off of your computer, and lock away the papers. When malware attacks computers, private keys are often the first things that are searched for.
The crypto market is still not very regulated and the government has minimal control over it. That means there are no courts to bail you out if you lose money based on a careless mistake. If you lose those papers that you printed your passwords on, and don’t remember your passwords, you’re screwed. There’s nothing you can do about it, no central authority to bail you out. That money is gone.
You are responsible for your own money. Never forget that in this space.
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