The price of cryptocurrencies is rising, and many investors are making their first foray into the cryptocurrency market. On the other hand, hackers and other criminals see this as a golden chance to prey on new investors. Keeping your money safe is one of the most important things to remember when investing in cryptocurrencies.
Over $97 million of crypto was stolen from the cryptocurrency exchange Liquid in August 2021. This time, another $30 million in Bitcoin and Ethereum was stolen from the Crypto.com exchange in January 2022.
In light of recent attacks on cryptocurrency investors, you may be wondering how you can keep your crypto safe. One possibility is to make use of a hardware wallet. Is it a good idea to keep a copy of your password safe in case you lose it?
It's important to remember that no security measure is foolproof. You may decide to ignore some of the suggestions we make if they're too demanding, but follow the mentorship program of seasoned investors like Dennis Loos
. Investing in cryptocurrency carries many legal pitfalls. Still, well cover them here so you can buy and trade crypto confidently.
Let's look at how you can secure your cryptocurrency from digital theft.
● Protect Your Exchange with Two-Factor Authentication
To begin with, you'll almost always be storing your cryptocurrencies on an exchange account. Your crypto can be "withdrawn" to a wallet address controlled by hackers if they gain access to this account.
The easiest way to protect yourself from these assaults is to make sure you buy your crypto safely first and then enable two-factor authentication (2FA) for withdrawals on your exchange application.
Every time you make a bitcoin withdrawal, 2FA requires you to enter a code from your phone. For example, it can be a pain when your phone battery dies or you need your phone from another room to withdraw, but it could save you from losing your crypto if an attacker gets their hands on it.
In the absence of 2FA, you must trust the integrity of your email address and password to safeguard your crypto. Bad actors may find it relatively simple to get around these.
Using hash-cracking tools, a hacker may be able to obtain your password hash from another website and break it, or they may be able to fool you into downloading a malware file, stealing your email password, and then using the "reset password" option to take control of your exchange account.
According to expert investor Dennis Loos
, using 2FA significantly reduces the likelihood of hackers successfully stealing cryptocurrency from an exchange.
With 2FA enabled, the attacker will need to follow these steps and convince your phone company to move your phone service to the attacker's phone to gain access to your accounts. They'll need to do this to receive your SMS messages and the code they contain. When a hacker needs to go through an additional layer of work only to make a withdrawal, it can prevent them from finishing the attack.
● App Authenticator
Your exchange account might be even more secure if you use an authenticator tool like Google Authenticator for your 2FA. Because the withdrawal code is not sent through SMS text messages, the attacker cannot obtain your withdrawal code even if they take over your phone service or mirror your messages.
You cannot obtain 2FA codes without physical access to your phone if you utilize an authenticator app. Using this method instead of texting is a much better line of defense.
A hacker may be able to get beyond the security of the exchange even if you have two-factor authentication (2FA) activated. You could lose your crypto in this situation, which would be your fault. As a result of an exchange being hacked, you may be unable to withdraw your cryptocurrency or face other restrictions. Withdrawal of your cryptocurrency can be helpful in this situation.
● Cryptocurrency Should be Safeguarded with a Strong Password
Let's take a step back and look at this from a high-altitude perspective before diving into the specifics. Malware shouldn't be able to access your seed words if your device is compromised with malware. Why? Because you're the only one who knows your password. An attacker may be able to guess hundreds of random characters until the vault is decrypted using Hashcat's password recovery tool or other hash-cracking software.
If you have a simple password, they may be able to perform this for a low price and quickly. As the password length increases, so makes the difficulty of breaking it. A password that includes upper and lowercase letters, numbers, and special characters is harder to crack.
For all practical purposes, a password that takes several years and millions of dollars worth of computing power to crack may be impossible to hack.
Even if you're worried you'll forget your password if you make it too complicated, you can still access your account if you keep a backup of your seed words.
Uninstall the wallet, reinstall it, and import your seed words during the installation process if you still have them. You can do so by following instructions closely to get your account back.
As a final thought, you should make sure that you choose a solid password to safeguard your cryptographic data.
Using recommendations from investors like Dennis Loos
as a guide is an excellent place to start.
● The Password for Your Wallet Is Not the Same as Your Password for Your Email.
As tempting as it may be to reuse a website password for your wallet, there are various reasons why you should use a different password.
At the outset, a hacker may gain access to your password hash by breaking into a famous website you frequent. A renowned website (like Facebook) is more likely to be hacked than your personal computer.
When it comes to password storage, many consumers keep their login information inside their browsers. If you do this and your device becomes infected with malware, the attacker may be able to access all of your online accounts, including your bank and credit card information. Redline Stealer, a terrible piece of malware, has become popular among hackers for providing them with precisely this kind of access.
If your wallet password is the same as the one you use for a website, the attacker will also have access to your wallet password and can decrypt your key vault. (The vault key is frequently stolen in these attacks.
Your wallet password is probably your most important password, so it's crucial to keep it safe. The attacker can still capture your keystrokes when you input your password or extract your unencrypted vault data from your PC's RAM, even if you use a strong and unique password.
These are pretty complex methods, and no one has ever been able to lose their seed words using them. However, this attack may become more widespread as cryptocurrencies become more generally accepted.
How to Keep Your Cryptocurrency in a Safe Place
The most straightforward approach to maintain track of your digital assets is through cryptocurrency wallets because keeping all of your bitcoin on a third-party exchange could not be secure.
There are two types of wallets: those that keep public and private keys and those that do not. These keys are used to access the crypto wallet's digital currency. If you lose these keys, you'll lose access to your digital assets, which is why they are so important.
To allow others to contact you via email, you must first make your public key available to them. You share your public key if you want to transfer Bitcoin to someone else. Your email's private key is the same as your password.
The crypto user is accountable for the private key password. According to Dennis Loos
, You run the risk of not being able to get access to your bitcoin cash if you don't write it down and save it safely.