Thursday, 12 July 2018 10:02

Cryptocurrency Security Guide: How To Guide on Protecting your Crypto

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Cryptocurrency is a relatively new turn in the financial trading sector, and is not completely free from risks or problems. New scams pop up every day and old ones reappear from time to time.

Hackers use simple tricks like fake wallets and phishing to obtain private cryptographic keys, so they can tamper with your blockchains and steal cryptocurrency coins. Just last week, scams were reported which diverted users’ funds to malicious wallets because the victims forgot to reset the default credentials. Malicious trading sites faking to be legitimates ones have added to the problem. Personal PCs remain vulnerable too like the torjan, CryptoShuffler, which managed to steal thousands of dollars through spying on Bitcoin wallets. The Trojan originally appeared last year but is on strike again.

Secure your Cryptocurrency Transactions

All this goes to show how trading accounts like Binance and Bitcoin wallets can get affected by cryptocurrency scams. The malware works in the background, silently monitoring the activities on a user’s PC, waiting to find a Bitcoin wallet address. When a string seems to match the address format, Trojans like CryptoShuffler swap the wallet ID of the user with a malicious wallet address of their own in the payment section. If the victim doesn’t have a malware scanner or anti-virus installed, then the hacker gets hold of all the cryptocurrency coins.

When you are trading in cryptocurrency, or sending and receiving bitcoins, security needs to be your prime concern. You need to monitor all the transactions carefully, and take measures to protect your exchange trading accounts, and offline and online wallets. Cybersecurity is something that most people take for granted, so get your friends involved too. The more people who safeguard their PCs and wallets, the less chances the crooks will have of stealing, and the more secure the network will become.

Understand the Scams

You need to be aware of the kinds of cryptocurrency scams that are showing up each day. One of the popular ones is the phone-porting attack. Hackers monitor your social media activity to keep track of your cryptocurrency discussions and searches. Most people give out their phone number or email address on cryptocurrency forums to build contacts. Scammers get hold of this information and call the mobile service provider, and trick them into thinking that you have lost your number, and manage to have your SIM transferred onto their phone. Then the hacker exploits the two-factor authentication to reset your password and get hold of your exchange account or wallet.

Hackers can use similar techniques to obtain sensitive information from your PCs. Ponzi schemes, ransomware and phishing attacks are all different kinds of cryptocurrency thefts and scams. While there is no steadfast rule to secure your account, you can use a combination of different techniques to make sure you don’t become an easy target. Here’s what you can do:

Distribute your Assets

Do not keep all your bitcoins in the same wallet or exchange. Distribute your assets so the risks are divided as well. It is extremely easy for a hacker to steal from a single account, but it would be much harder to try to break into multiple accounts which have different sets of email addresses and passwords. Whenever you open up a new trading account, consider using a different email ID as that will make your financial assets more secure.

Secure your Savings

Experts warn against storing large amounts of Bitcoins or similar cryptocurrency in digital wallet apps or even smartphones. For large cryptocurrency sums, use an offline wallet which is not connected to the internet. Offline wallets can be USBs, hard drives or even paper. As long as your offline wallet is encrypted and stored in a secure space, the hacker will have little chance of gaining access to it. For day-to-day smaller transactions, you can keep an online wallet which will be linked to the internet. You can login to that to check your financial transactions, and keep the offline wallet as a separate savings account. This arrangement reduces the likelihood of scammers stealing from your larger cryptocurrency sum.

Backup and Encrypt your data

Secure offline wallets like Trezor cost less than $100 and are easy to setup. You simply need a PIN and a recovery seed which is like a password in case you forget the PIN number. These devices are pretty robust, and can be used to store private keys or cryptocurrency locally. For additional security, you can keep a backup of the hard disk in a separate location in case you lose the device or cannot recover the PIN. Any portable device that you use for storing cryptocurrency coins or backups should be properly encrypted. Without encryption, hackers can easily get hold of the information stored on the device. Specialists recommend storing such devices in a safe box so intruders cannot get physical access.

There are apps like Mycelium Wallet which integrate easily with offline wallets, and make your transactions seamless. Some other apps like Samourai Wallet are working to enhance cryptocurrency encryption and privacy features for users. But beware of apps that look too lucrative and don’t store too many cryptocurrency coins in them. The safest option is only to keep a small amount for daily use in your online wallets, and store all your savings in a locked-up offline wallet. Additionally, don’t leave your private keys lying around on your PC, instead only keep them in a secured hard disk.

Be wary of cryptocurrency traders who give you coin offerings and attractive promotions for singing up. These could be scammers disguised as exchange traders. The cryptocurrency, OneCoin, that launched last year, has turned out to be a Ponzi scheme, and people have already invested $350 million worth of cryptocurrency coins. The Securities and Exchange Commission is investigating the matter, but this is something that is likely to happen again, if investors don’t remain cautious.

Be proactive in your investments and follow the news. If industry leaders disassociate from a trader, you should consider that a warning flag and move your cryptocurrency elsewhere too. If the exchange has too many technical problems, changes policies frequently or offers problems in Bitcoin withdrawal, treat them suspiciously. Always deal with reputable and secure trading companies which do not provide extremely attractive or flexible offers.

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