We have praised the blockchain for its improved security, but is it really that safe? Crypto hacks in 2022 resulted in investors losing over $3 billion of their digital assets. It is the biggest loss from crypto hacking recorded in one year, having increased by 58% from 2021.
The blockchain is already so secure that you only have to implement a few things for your assets. So, here is our take on what you can do to protect your crypto assets against hacking.
Practical Steps to Protect Your Crypto Assets
Cryptocurrency has gone beyond just being a payment solution. You can now explore the best online casino games using cryptocurrency deposits, and if you are an online gamer or even hold crypto assets till they appreciate, there are far more ways to profit from cryptocurrency today than there were a decade ago as we have things like crypto live charts and various trading options as well. These applications open you up to investing and trading lessons – however, one wrong move, and you can lose it all. With that said, there are some reliable steps to take in order to secure your assets.
They include the following:
Watch Out for Scams
The crypto industry has become so crowded that it has become increasingly difficult to recognize scams. Although most cons are not necessarily hacks, some can still result in outright hacking. An example would be a fake email requesting your seed phrase.
Some only need your password hash to crack the entire password. Recognizing cryptocurrency schemes takes due diligence on your part.
Keeping that in mind, you should be aware of the following:
- Pump and dump schemes where the creators overhype their crypto to gain investments
- Fake initial coin offerings
- Phishing sites and messages
The easiest and most effective way to avoid crypto fraud and hacks are to keep an eye out for these scams. Nevertheless, fraudsters and hackers can hide their intentions so cleverly that you need more protective measures.
Don’t Keep Your Crypto Assets on Exchanges
It is risky to leave your cryptocurrencies on an exchange. They will be exposed if the platform is compromised. You can refer to FTX’s hack in 2022, which resulted in the loss of over $400 million worth of crypto.
That is one of many incidents that plagued the industry in 2022. Moving your assets to a secure location immediately after a transaction is best. The longer you leave them on the exchange, the more you risk losing them to a hack.
This is not to say that crypto exchanges are not safe. They are, but they are also the primary targets of hackers. On entry, they could steal more assets than if they targeted one person.
Use a Wallet
Crypto wallets add an extra layer of protection over what exchanges provide. They are more personalized and suited for individual ownership. Hence, they are ideal for storing cryptocurrencies.
When using wallets, you can choose between cold and hot storage services.
- Cold wallets: These are hardware storage solutions that look like USB drives. They provide physical storage for your coins. Furthermore, their offline nature makes them immune to online hacks.
Even when conducting transactions, these wallets produce a signature without exposing your private key. Malware would still be unable to break into your storage.
A hacker could attempt to steal the hardware wallet, but there will be little use. It is virtually impossible to break into it without the private key. Ledger, Trezor, and KeepKey are popular hardware wallet providers.
- Hot Wallets: These are more flexible than the hardware variants. They are available on mobile and desktop devices. Also, you don’t have to risk losing your hardware wallet.
There could be secondary protective measures like biometric authentication, but the primary one is your seed phrase. It prevents anyone from accessing your crypto assets on a different device.
To reduce the risk of hacks, seed phrases are not recoverable. This security measure works both ways. It can stop hackers from accessing your wallet and shut you out if you lose the phrase.
Use VPN When Using a Public WiFi
We strongly advise against using public WiFi, as it is often unsecured. A hacker with good enough expertise can steal sensitive data, including your wallet password. Use a virtual private network if you can’t help but get quick work done with public WiFi.
VPNs mask your location, making it impossible for anyone to track you. Also, they encrypt the information you send across the web. A hacker will be unable to read the data.
You are primarily responsible for the security of your crypto assets. Using different security measures like a wallet or VPS does not excuse you from the ongoing threat. They will function more effectively if you are conscious of the dangers.
Beware of phishing sites that request passwords and other security information. Verify any ICO to ensure it is not a scam. Use hardware wallets, but keep your private key safe and accessible only to you.