5 Ways To Secure Your Cryptocurrency Wallet

Secure Your Cryptocurrency Wallet: On the 16th of April 2021, Bitcoin, the largest cryptocurrency, rose to more than $64,000 which is the highest price ever recorded of the cryptocurrency. The price change of cryptocurrencies is highly volatile, attracting both investors and cybercriminals to the market. Since the breakthrough of Bitcoin, the first cryptocurrency in 2009, there have been several hacks and heists reported on exchange companies and cryptocurrency wallets. 

According to the “2019 Cryptocurrency Anti-Money Laundering (AML)” report from CipherTrace, cryptocurrency crimes across the world hit over $4.3 billion in 2019. Cybercriminals robbed over $125 million in Ethereum, Bitcoin, and other digital currencies from different cryptocurrency exchanges in 2019.

In 2021, hackers stole over $90 million in more than 69 different cryptocurrencies from Liquid Global, a Japan-based exchange platform. While about $16 million in assets from more centralized tokens have been frozen, although the hackers keep swapping stolen ERC-20 tokens for ETH and wETH through decentralized exchanges (DEXs). 

The threat to your cryptocurrency is through your cryptocurrency wallet, Hot Wallet ( digital wallet) and recently cold wallet ( Hardware wallet), or exchange providers. Although your cryptocurrency is not stored in your crypto wallet, the wallet only holds a private key which allows you to claim ownership of your cryptocurrencies and trade them online.

The private key is more like the password to the blockchain storage of your cryptocurrency and anyone who gets hold of it can claim ownership and do anything they deem fit with your crypto coins. Hackers use sophisticated technology to compromise both digital wallets and hardware wallets and steal/transfer crypto assets without the user’s knowledge. Securing your wallet is essential when it comes to protecting your digital currency against cyberattacks.

Here are some of the ways to secure your cryptocurrency wallet :   

Secure Your Cryptocurrency Wallet
  1. Use a Cold Wallet to Secure Your Cryptocurrency Wallet

The thing that differentiates cold wallets from hot wallets is that it is not connected to the internet so it is not prone to cyberattacks. A general cryptocurrency etiquette is to store the larger portion of your crypto asset in a cold wallet because it is more secure.

However, there is a 30 minutes video on youtube of a hacker successfully hacking a Trezor wallet ( a major cold wallet provider) because the owner has forgotten the password to the device. This was a white hack because the owner permitted it, however for someone to hack a cold wallet they need physical access to your cold wallet and it takes more technological know-how to carry out compared to that of a hot wallet. 

The 2019 hack of BITpoint, a Japanese exchange platform further proves this point, hackers were able to cart away over $32 million from its hot wallet targeting more than 50,000 users. The exchange platform however says that its cold wallet was not affected by the incident.

  1. Use Secure Internet to Secure Your Cryptocurrency Wallet

If you are using a hot wallet, make sure you are using a secure internet, even with a hot wallet a secure internet will further shield your private key against hacks. Avoid public wifi when you want to do any online activity with your cryptocurrency wallet, even when accessing through your home network, use a VPN for additional security. A VPN changes your IP address and location, keeping your browsing activity safe and private from threat actors.

  1. Maintain Multiple Wallets

Since you can create and own multiple wallets, you can diversify your cryptocurrency by putting them in different wallets. Use one wallet for your daily transactions and keep the rest in a separate wallet and keep the larger share of your portfolio in a cold wallet. This will protect your portfolio and mitigate the loss of any breach to your crypto account.

  1. Secure Your Device

Your personal device should be up to date with the latest anti-virus or malware detectors to defend against newly discovered vulnerabilities. Use a strong antivirus and firewall to improve your device’s security to avoid hackers from taking advantage of the weakness by coming up with new ways to target the vulnerability.

  1. Change Your Password Regularly

The importance of a strong password can not be underrated while talking about cyber security. Studies have proven that 75% of millennials in the United States use the same password on more than 10 devices, software, and other social media accounts. It also stated that most of them were using the same password in over 40 different places.

You can use a password manager to make sure you have a strong and complex password for different accounts and devices, which is hard to guess and change regularly. Use separate passwords if you have multiple wallets. Opt for two-factor authentication (2FA) or multi-factor authentication (MFA) for additional security.

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