If you’re investing in crypto, you should take the security of your investment very seriously. Even if you haven’t invested a lot, the beauty of crypto is that your investment can skyrocket at any time and suddenly you may start feeling a bit uneasy about your current security measures. At the end of the day, if something goes wrong and you lose your crypto, it’s very unlikely that you will be able to recover it.
There are multiple risks in the crypto space – from your wallet or device being hacked to becoming a victim of a scam and giving away some of your security details to simply losing your password and seed phrase and not being able to access your wallet (I’m sure you’ve heard at least a few stories of people losing millions worth of Bitcoin this way).
Luckily there are also multiple layers of security you can implement to protect your digital assets. I’ll cover all of them below and you can then decide which ones you want to implement depending on your personal circumstances.
Trusted Device and Network
This should be pretty obvious but the circumstances can make it sometimes a bit tricky. When accessing your wallet or logging into your account on a crypto exchange, you should always use a device and network you trust – ideally your own computer or phone and a secure, password-protected network. Of course, the circumstances may force you to use, for example, an open public network but this just highlights the need to use other security methods described below.
Just to clarify - I'm not in any way affiliated with any of the software and hardware manufacturers mentioned in this article, nor do I get any commission for recommending these products. I simply recommend them based on my personal positive experience.
Antivirus software
Since we’re talking about the device you use to access your crypto, it is worth considering installing some decent antivirus software and keeping your system up to date, as well as avoiding visiting dodgy websites, to reduce the probability of picking up spyware or malware.
VPN
I think that a good VPN is a must. Especially considering that it’s useful even if you don’t invest in crypto. I use Nord VPN as it’s easy to use, sensibly priced, doesn’t seem to slow down my internet connection and it has great features. There are plenty of options available (a couple of popular ones are Express VPN or Cyber Ghost) but you should check if your VPN has the following:
- Good encryption
- Strict no-logs policy
- The company is based in a country, which is not part of 5 Eyes or 14 Eyes (for example Switzerland or Panama)
- Has an automatic kill switch (shuts down your internet connection if VPN stops working)
- Has DNS leak protection
- Blocks access to harmful websites
- Has some sort of dark web monitor, which checks for your details being available on the dark web.
Bear in mind that a VPN will not protect you if your real IP is already known to the attacker.
Brave Web Browser
I used Safari and Chrome for many years but eventually, I switched to Brave partially because it’s really easy to transfer your data (bookmarks, password, etc.) from other browsers but also because Brave has some truly awesome features:
- It’s more secure than other browsers
- It blocks adverts
- It allows you to earn crypto (BAT) while you browsing the web
Paper wallet
So you have your device, network, and browser sorted, now onto your crypto wallet. Never store on your computer, phone, email, cloud, etc. your password or your seed phrase. The best way to keep them secure is to write them down on a piece of paper, make a copy or two, and store them all in secure locations – somewhere at home, bank deposit box, trusted friend or family member, etc. You should have at least one backup in case your own copy is lost or damaged but always make sure that all copies are kept somewhere safe!
2FA (2-factor authentication)
You should enable it on all exchanges, wallets, bank accounts, etc. It’s a pretty standard feature and most of us are used to it by now (even if it’s sometimes a bit of a pain!) but it’s really important to use it wherever possible. That little bit of inconvenience when logging in can one day protect your money.
Yubikey
This is just another form of 2FA. It’s a little device that connects to via USB or NFC to your phone or computer and requires pressing a button to authorise a login attempt or transfer of funds. Each Yubikey has to be individually paired with an app or a website, although you can pair more than one key if you want to have a backup one. If you lose the key or don’t have access to it, you can try to log in using a different method of 2FA (such as your email or phone) but many functions, for example, transfers of crypto or money out from the exchange, will be blocked for 24-48 hours.
While most major exchanges support Yubikey, you may find that some crypto wallets, for example, MetaMask, don’t yet have such support.
You should buy Yubikey only directly from the manufacturer's website to minimise the risk of buying a counterfeit product.
Hardware Wallets
They’re a must for storing larger amounts of crypto or any long-term hodl portfolio. You have to transfer your crypto from the exchange or software wallet to your hardware wallet, which requires paying a network fee and can take a little bit of time. Of course, this isn’t particularly convenient if you trade a lot, so you may want to keep some of your funds on the exchange ready to deploy but the majority should be kept in a hardware wallet, where it’s safe from the exchange being hacked, going offline, etc.
Same as with Yubikey, only ever buy a hardware wallet directly from the manufacturer (Ledger or Trezor). To the best of my knowledge, all stories about hardware wallets being hacked turned out to be wallets bought on Amazon, eBay, etc. No point putting your funds at risk just to save just a few dollars.
Bear in mind that whenever the crypto market is pumping, it’s all over the mainstream media and lots of new people are getting into crypto, hardware wallets suddenly are in high demand and it may take few weeks to get one, so it’s better to buy one in advance.
Common Sense
Last but certainly not least – just use your common sense :-) No amount of tech will protect you if you just give away your login details or send your crypto to someone who’s promising to double it in some ‘magic airdrop’ or something. We all like to think that we’re sensible and won’t fall for it but scammers keep coming up with new ideas and ways of trapping us into thinking that we’re perfectly secure until we suddenly click on one wrong link.
There are plenty of ways to make life-changing money in crypto. Don’t be too greedy, don’t rush, double-check everything and maybe be even a little bit paranoid to stay safe ;-)
I hope you found this article helpful and interesting. If you’re interested in crypto tutorials and crypto market commentaries, please check out my YouTube channel and follow me on Twitter.
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Disclaimer
The content covered in this video is NOT to be considered investment advice.
I’m NOT a financial adviser. These are only my own speculative opinions, ideas and theories.
Do NOT trade or invest based purely upon the information presented in this article.