Learning how to keep your crypto safe has never been more important. It’s been a crazy year for the world of cryptocurrencies, from early investors of meme coins making millions almost overnight to Web3 innovations and people becoming overnight millionaires with jpegs of apes, to the wild swings in Bitcoin and catastrophic demise of other crypto tokens.
Amid all the action, there’s also no shortage of money to be made in the $2 trillion crypto economy. However, wherever there is money to be made there is money to be lost and there is certainly no shortage of people working to separate you from your money in any way they can.
In an article from bitcoin.com, they noted that
“In the time it takes you to read this sentence, $850 will have been lost to cryptocurrency scams. In the time it takes to complete this article, that figure will have risen to $17,000. Phishing; fraud; theft; hacking; it’s all rife. In the first two months of 2018, there were 22 separate scams involving thefts of $400,000 or more. Put it all together and that equates to an average of $9.1 million a day. Oh, and that doesn’t include 2018’s outliers – Coincheck, Bitconnect, and Bitgrail. Otherwise, the total would actually stand at $23 million a day.”
As the saying goes, an ounce of prevention is worth more than a pound of cure.
It might have looked like a great time to jump on the crypto wave for the past year.
But some may say it’s a good thing you didn’t, as you could have lost everything you worked hard for.
The web3 and crypto landscape is changing rapidly as businesses move online. In fact, social distancing and COVID-19 accelerated the growth of online shopping by 4-6 years and in many ways also accelerated the growth of crypto as a whole.
That’s why many of the safety tips in this article are things that you can start applying right away.
In fact, this blog you’re reading came from me being a victim of multiple hacks and scams.
I started this blog as a way to share what I am learning while trying to stay safe in the crypto space.
In this guide, we’ll cover some of the top crypto safety tips to help you start regaining your confidence while maneuvering through the crypto landscape.
Whether you want to dabble in crypto part-time or become a full-time investor, this guide is for you.
Let’s get started.
Disclaimer: Please note that some of the links in this article are affiliate links, which provide me a small commission at no cost to you. These are merely good security tools to use in tandem with these safety tips. You can read my affiliate disclosure in my privacy policy.
How to keep your crypto safe and avoid Losing it to scammers?
Here is a list of the best security tips for potential crypto enthusiasts to get started.
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How to keep your crypto safe: Use Strong Passwords
Almost every website we visit, from crypto exchanges to hyper-secure banking sites, insists you create a user account and think up a password. This is great but there’s just one problem, our memory can’t keep up with the sheer number and variety of passwords that we need to use.
Before being scammed I was one of those people who got the bright idea to use the simplest possible password, like “my name & favorite number” or “my dog’s name.” I also tried memorizing one superbly random password and using it for everything. I now know that either strategy is likely to make both you & me the latest victims of identity theft.
Avoid making yourself a potential victim. Use a password manager, and use your password manager’s features correctly. When I got a password manager, I felt a lot better knowing that I didn’t have to remember strong, unique passwords for all my accounts. The password manager stored them for me and even helped me generate new, random ones.
Figuring out which are the best password managers is beyond the scope of this article. However, most of the best password managers that are trusted and recommended cost money, though you can use some of them for free if you accept certain limitations.
If you don’t want to spend a lot of time researching password managers and wondering which to choose, don’t worry. There are a ton of websites like Pcmag that have great articles on the best password managers.
I’ve outlined below, the best password managers they recommended based on their research.
- Keeper Security
- Dashlane
- NordPass
- 1Password
- LastPass
- Bitwarden
- Logme once Password Security suite
- Roboform
- Password Boss
- Sticky Password
Using password managers is great providing that you keep your master password for your manager safe. If a hacker or scammer manages to get your master password for your manager they would essentially have the keys to your kingdom and everything in it. With that being said, here are some tips should you choose not to go the password manager route:
Meet password requirements
For Google, your password can be any combination of letters, numbers, and symbols (ASCII-standard characters only). Accents and accented characters aren’t supported.
You can’t use a password that:
- Is particularly weak. Example: “password123”
- You’ve used it before on your account
- Starts or ends with a blank space
A strong password should be easy enough for you to remember but nearly impossible for someone else to guess. Here are some of the things that make a good password use these tips to create your own.
- Make your password unique – Use a different password for each of your important accounts, like your email and online banking. Reusing passwords for important accounts is risky. If someone gets your password for one account, they could access your email, address, and even your money. If you have trouble remembering multiple passwords, you may find a password manager more suitable for you.
- Make your password longer and more memorable – Long passwords are stronger, so make your password at least 12 characters long. These tips can help you create longer passwords that are easier to remember. Try to use:
- A lyric from a song or poem
- A meaningful quote from a movie or speech
- A passage from a book
- A series of words that are meaningful to you
- An abbreviation: Make a password from the first letter of each word in a sentence
Avoid choosing passwords that could be guessed by:
- People who know you
- People looking at easily accessible info (like your social media profile)
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Don’t use personal info
- The name of your child or pet
- Your nickname or initials
- Important birthdays or years
- The name of your street
- Numbers from your address
- Avoid personal info and common words – Avoid creating passwords from info that others might know or could easily find out. Examples: Avoid simple words, phrases, and patterns that are easy to guess.
Examples:
- Obvious words and phrases like “password” or “letmein”
- Sequences like “abcd” or “1234”
- Keyboard patterns like “qwerty” or “qazwsx”
After you create a strong password, take steps to keep it safe. Write down your password only if absolutely necessary and if you do, don’t leave it on your computer or desk. Make sure any written passwords are stored somewhere that’s secret or locked.
How to be prepared if someone gets your password
Google uses your recovery info to help you in case they detect unusual activity in your account.
Add a recovery email address
- Go to your Google Account.
- On the left navigation panel, click Personal Info.
- On the Contact info panel, click Email.
- Click Add Recovery Email.
Add a recovery phone number
- Go to your Google Account.
- On the left navigation panel, click Personal Info.
- On the Contact info panel, click Phone.
- Click Add Recovery Phone.
Recovery info can be used to help you:
- Find out if someone else is using your account
- Take back your account if someone else knows your password
- Get into your account if you forget your password or can’t sign in for another reason
2. Use two-factor authentication (2FA)
The next step up from using a password is using 2FA. Two-factor authentication (2FA), sometimes referred to as two-step verification or dual-factor authentication, is a security process in which users provide two different authentication factors to verify themselves. If you’re a fellow crypto enthusiast learning how to keep your crypto safe then you should already know 2FA is a must.
The great thing about 2FA is that it’s implemented to better protect both a user’s credentials and the resources the user can access. This type of authentication provides a higher level of security than authentication methods that depend on single-factor authentication (SFA), in which the user provides only one factor — typically, a password or passcode.
When setting up your 2FA method you will need to provide a password as the first factor and a second, different factor — usually either a security token or a biometric factor, such as a fingerprint or facial scan.
This adds an additional layer of security to the authentication process by making it harder for scammers to gain access to your devices or online accounts because, even if your password is hacked, a password alone is not enough to pass the authentication check.
There are a variety of different devices and services for implementing 2FA — from tokens to radio frequency identification (RFID) cards to smartphone apps.
Two-factor authentication products can be divided into two categories:
- Codes/tokens that are given to you to use when logging in; and
- Infrastructure or software that recognizes and authenticates access for you if you are using your tokens correctly.
Authentication tokens may be physical devices, such as key fobs or smart cards, or they may exist in software such as mobile or desktop apps that generate PIN codes for authentication. These authentication codes, also known as one-time passwords (OTPs), are usually generated by a server and can be recognized as authentic by an authentication device or app.
The authentication code is a short sequence linked to a particular device, user, or account and can be used only once as part of an authentication process.
3. Use multiple Email addresses
Another way you can increase your security and make it more difficult for hackers to steal your funds is to use multiple email addresses when creating accounts. There have been many instances where a hacker was able to gain access to someone’s email account and use it to take control of the victim’s social media and other important services.
Keep your personal email account separate from your business and investment email accounts. Whenever you are creating an account on an exchange (like Binance) or need to use an email for your business create a brand new email address. If you want to go further, you can create a main email account and have the emails from the other accounts forwarded to the main account.
This will not only prevent hackers from having total control of your funds if they do hack your email but you will also have better peace of mind knowing you have an extra layer of security protecting your funds.
4. Use multiple Exchanges
There are many reasons why you would want to use multiple exchanges not only from a security standpoint but also from a practical standpoint. Some exchanges experience downtime from time to time due to unforeseen circumstances and as life would have it that may be the very same time that an opportunity arises and you are unable to take advantage of the opportunity.
Having all your money in one exchange leaves you vulnerable to many unfortunate factors or inconveniences such as:
- You get liquidated – A lot of advanced traders trade using leverage and this can be considered risky if you try to do this as a beginner and don’t know what you’re doing. When trading with leverage you have the risk of being liquidated. This means that an exchange forcefully closes your leveraged position due to a partial or total loss of your initial margin. It happens when you are unable to meet the margin requirements for a leveraged position or in other words you don’t have sufficient funds to keep the trade open.
- You want to buy or sell specific altcoins – Most people when they hear of crypto they think about Bitcoin, Ethereum(ETH), or some other popular coin. However, there are thousands of different crypto coins that can be traded and many more will join the market in the future.
Some of the biggest platforms like Binance, Kucoin, or Coinbase don’t have all the existing crypto coins listed. So, if you would like to find some hidden gems or small-cap coins then it makes sense to open accounts at multiple crypto exchanges.
- You want to cash out your profits – Let’s say you have made some serious gains by buying and selling cryptocurrency. The logical thing to do next will be to take profit or cash out your initial investment. Unfortunately, not every crypto exchange may support withdrawals to your bank account by SEPA or SWIFT as well as you may be living in a country that doesn’t support certain withdrawal methods.
To avoid withdrawal issues on crypto exchanges and to be able to get your profits at your leisure, owning several accounts at multiple crypto exchanges can help you a lot.
5. Self-custody your crypto
Just as the name implies, self-custody signifies that only you have possession of your cryptocurrency or other digital assets because you control the private key to your wallet. In addition, you have the responsibility to safeguard access to your private key because it is not stored anywhere else.
You have access to your funds at any time instead of relying on a financial middleman. This flexibility is what attracts many users to participate in Defi but failing to also take the time to learn how to keep your crypto safe may override the attraction of flexibility.
Using your wallet to self-custody your crypto can seem overwhelming but it is actually pretty simple. Think of it as using a regular investment or payment app with additional security measures.
You can basically do the same things you would usually do with a traditional bank account like check your balance, view your transaction history and you can also invest using DeFi applications, as well as send digital money to your friends. You can even link some self-custody wallets to your bank and deposit money to exchanges etc.
Summary
All of the security measures mentioned above can help you save yourself from a lot of heartache and pain and most, if not all, can be done at no cost. More importantly, you learned how to keep your crypto safe and out of the hands of scammers.
Ultimately, I recommend you implement these safety measures and anything else that can keep your crypto safe, as soon as possible. The world of scammers and hackers is constantly evolving and they are always developing new ways to rob you of your money. It’s up to you to evolve as well and ensure your own protection.
Did you miss any of your picks of the best safety tips? Let me know in the comment section below.