Introduce
As more and more people enter the crypto market, security becomes a key factor in protecting digital assets. According to a report from Chainalysis, losses due to crypto fraud will reach $1.7 billion by 2023, highlighting the urgent need for basic security measures.
I. Secure Crypto Storage
Wallet Types and Security Features
- Hot Wallets:
- These are software wallets, including mobile, desktop, and web wallets like Coinbase Wallet ( Coinbase Wallet ), MetaMask, Exodus, Mycelium, and Electrum. According to NerdWallet , MetaMask focuses on Ethereum and ERC-20 tokens, while Electrum is suitable for Bitcoin.
- Advantages: Easy to use, suitable for frequent transactions.
- Cons: Internet connectivity increases the risk of hacking, especially if the device is infected with malware. Therefore, strong passwords, 2FA, and antivirus software are essential.
- Hot wallets should be used for small amounts, as they are not as secure as cold wallets for long term storage.
- Cold Wallets:
- These include hardware wallets and paper wallets. Hardware wallets like the Ledger Nano X, Trezor Safe 3, Cypherock, NGRAVE Zero, and KeepKey are highly rated. According to CoinBureau , the Trezor Safe 3 supports over 8,000 crypto assets, while the Ledger Nano X costs between $119 and $149, supports multiple networks, and has Bluetooth connectivity.
- Pros: Offline storage, reducing the risk of cyber attacks. For example, Kraken stores 95% of assets in cold wallets.
- Disadvantages: High cost (e.g. NGRAVE Zero costs 498 EUR) and requires safe physical storage. PIN and seed phrase backup required on paper, not stored on a digital device.
- Paper wallets: While once popular, they are now discouraged due to risks involved in the creation process, as the generating app may send the private key to an insecure server.
Actions required for Archiving
- Combine hot and cold wallets: Keep a small portion in a hot wallet for trading, and a large portion in a cold wallet for long-term storage. For example, Ledger can integrate with hot wallets like Crypto.com.
- Software Updates: Make sure your wallet and device are always updated to patch security vulnerabilities, as recommended by Arkose Labs .
- Protect your device: Use antivirus software, avoid public Wi-Fi, and consider a VPN from a reputable provider like NordVPN for added security.
II. Safe Crypto Transactions
Choose a Reliable Exchange
- Exchanges like Coinbase ( Coinbase ), Kraken ( Kraken ), and Gemini are highly regarded for their security. According to Business Insider , Kraken stores 95% of assets in cold wallets, has regular reserve audits, and supports 2FA. Coinbase automatically enables 2FA with support for security keys like Yubikey, according to Coinbase Help .
- Make sure the exchange complies with regulatory requirements, such as FDIC insurance for Gemini, according to Investopedia .
Account Protection
- Use complex, unique passwords, and check their strength at Have I Been Pwned . According to Coinbase , passwords should be at least 16 characters long.
- Enable 2FA, preferring an app like Google Authenticator over SMS to avoid the risk of SIM theft, as recommended by BitPay .
- Some exchanges support trusted IP restrictions, enhancing security, according to Security.org .
Practice Safe Trading
- Beware of phishing: Double-check the URL, don't click on suspicious links, and always verify email addresses, according to CoinTelegraph .
- Avoid public Wi-Fi, use a VPN like ExpressVPN , and monitor account activity regularly for abnormalities.
III. Common Threats and How to Deal with Them
Phishing Attack
- Phishing typically starts with a fake email from a wallet or exchange, asking for an update. In 2021, crypto phishing losses reached $14 billion, according to Chainalysis.
- How to identify: The email feels urgent, asking for a private key or password.
- How to avoid it: Double-check email addresses, don't click on links, use 2FA, and keep software up to date to detect malware.
Exchange Hack
- Exchanges like Coincheck lost $550 million in hacks. To protect yourself, choose an exchange with a history of security, enable 2FA, and only keep the necessary funds on the exchange, moving the rest to a cold wallet.
Malware/Ransomware
- Cryptocurrency theft malware detections increased by 56% from H1 to H2 2024. Prevent by updating software, using antivirus software, and being careful with files downloaded from unknown sources.
Lost Private Key
- Never share your private key or recovery phrase. Use a hardware wallet like Ledger for offline storage, and keep safe backups on paper.
Investment Scams and Fake Websites
- Signs of a scam include promises of high returns, pressure to invest quickly, and unsolicited messages. Research the project carefully, check the team, and only trade on reputable exchanges like Coinbase or Crypto.com.
IV. Conclusion
Security in trading and storing digital assets is an ongoing process that requires vigilance and regular updates. By choosing a reputable exchange, using a secure wallet, and implementing protective measures, users can significantly reduce their risks. The field is constantly evolving, so stay up to date on the latest security practices to protect your assets.
