Crypto is not a FAD anymore, it’s here to stay.
And with every new wave of technology they’re always those who make it bad for everyone.
Yes, I’m talking about scammers and hackers. Since the dawn of the digital age scammers have been finding ways to separate you from your money.
According to the FTC, in 2021 alone crypto users lost $770 million due fraudulent schemes fueled by social media.
This is a big PR problem for the cryptocurrency world.
Sadly, it will never stop but the good news is that they’re ways you protect your cryptocurrency assets and when transacting.
That’s why if you’re new to the world of crypto you must understand and practice the basics of crypto security.
This guide assumes that you’re a beginner so start from the basics.
Before we begin let’s look at what will be required to buy the crypto digital asset you’ll be protecting.
Remember that crypto transactions are done online, just like traditional online banking.
This can be done with your laptop, desktop and even your mobile phone which makes it very appealing for hackers and scammers.
How some crypto scams operate
These schemes are very creative to be honest.
One that really stands out is where you as a potential victim would receive a paper mail with a USB inside and a letter saying that you’ve won a lot of money or that a reward is waiting for you and that you must insert the USB drive inside your computer to get more details on claiming your prize.
When in fact the USB drive has a virus that will infect your computer.
Basically deploying ransomware on your machine. Here’s a recent article done on TechRadar.
This scam was even running from 2020.
TheHackerNews ran an article back then about how 35,000 computers got infected with crypto-mining bot.
Look if it seems too good to be true, it probably is.
You should never plug an unfamiliar USB drive in your computer. Even if you received it as a gift, use any of the following USB scanner softwares to check for any virus.
- USB Threat Defender
- Adaware Live CD
- Panda USB Vaccine
These are some of the most popular and trusted ones.
Other crypto scams that happened pretty recently:
- Scammers stole a total of $14 billion in 2021. (source)
- Thieves made off with a multimillion dollar NFT collection. (source)
The thing is whenever there’s a new technological disruption along you can always guarantee these things will happen.
In spite of all that, the crypto industry is getting bigger and bigger every year.
The requirements to buy cryptocurrency
1. An exchange
Think of an exchange as a bank that enables you to buy and sell. Not all exchanges are made equal as some are really sketchy.
Generally it’s recommended to start with well-known ones such as Coinbase, Binance, Crypto.com and BlockFi.
Most who are new to cryptocurrency normally head to Coinbase as it has a pretty straight-forward and easy to use interface.
2. Somewhere to store that crypto
This is where a lot of people mess up. After they purchase it, they let it on the exchange thinking that it’s safe.
Well, it’s not. If the exchange gets hacked or goes under due some unfortunate event, your crypto is pretty much gone.
This has happened many times in the past. Here’s a quick list of exchanges that got hacked:
- Mt Gox in 2011: 850,000 Bitcoins got stolen. (source)
- KuCoin in 2020: $281 million worth of coins and tokens gone. (source)
- Upbit in 2019: $45 million worth of crypto gone. (source)
- Binance in 2019: Hacker stole 7000 Bitcoins. (source)
- Coincheck in 2018: $534 million worth of crypto vanished. (source)
They’re many more examples but I hope you get the picture.
Do not leave your tokens on exchanges, instead move it to a soft wallet like Metamask but it’s even better to use cold storage with USB drives like Ledger Nano or Trezor.
With cold storage you own the keys to your tokens, when it’s on the exchange they own the keys not you. Plus it’s harder for hackers to get access to your tokens because you have the keys stored offline in the cold wallet because it’s not online.
4. What crypto you will buy
As of May 4th, 2022, they’re over 19,273 different tokens listed on CoinMarketCap.
If you’re new to cryptocurrency this seems very overwhelming. But as you start doing more research you’ll realize that more than 90% of them are garbage.
The goal of this guide isn’t to tell what you should buy as you must do in-depth research and figure that out on your own.
Don’t depend on Youtubers, Twitter or TikTok to tell what tokens you should buy. If you do that you will get scammed.
Make a habit to find out:
- Whos behind the project
- Who are the team members (Check their Linkedin profiles too)
- Their social accounts (Reddit, Twitter, Facebook etc)
- Do they any experience in tech
- Is their Github repository active with regular major and minor updates to their code.
- What problem is the project solving (VERY important)
- Do they have any partnerships which any reputable companies
Don’t be lazy when it comes to buying or you WILL get burnt.
7 Crypto security tips to protect your digital assets
1. Use a strong password
I know it’s very inconvenient sometimes to come up with a strong password but it’s worth the effort.
In the cryptocurrency world having a strong password will be one of your first line defense against hackers.
When creating passwords for your exchange or soft wallet accounts like MetaMask, do not use things like dates, family member names or anything that’s related to you.
Hackers have very powerful tools and algorithms to guess your password and you would be surprised how well they work as most people make their password too easy to guess.
This is commonly known as brute force attacks.
What they do is buy a list of commonly the most commonly used passwords from somewhere on the dark web. These password lists are compiled from password data breaches.
Data breaches are more common than ever and there’s a good chance your password might be on the list.
The other big mistake is to reuse your password for several different sites and apps. Make hard for hackers by using different passwords by using a generator to create unique ones.
List of password generators you can use:
2. Use 2FA (Two-factor Authentication)
Two-factor authentication is an extra layer of security that can be added to an account login.
With two-factor authentication enabled, a user will need to provide not only their username and password, but also a second piece of information, such as a code from a mobile phone, in order to log in.
Use this for your exchange, soft wallet and even email accounts.
Two-factor authentication is very effective because it provides an additional layer of security beyond a password.
With two-factor authentication, even if a hacker knows your password, they cannot access your account unless they also have access to the second factor, which is usually a code sent to your phone.
This makes it much more difficult for hackers to gain access to your account, and helps to protect your information.
3. Use a different email account for exchange accounts like ProtonMail
Services like ProtonMail and Mailfence use end-to-end encryption which makes it hard for hackers to decode the data transferred over the network.
Use Gmail, Yahoo and other common email services for other day-to-day things like social media and newsletters.
To make it even more secure use a different email for the different crypto exchanges that you use to buy and sell crypto.
4. Keep majority of your crypto offline
If you do a lot of crypto trading regularly then you have a good reason to keep some stored on an exchange.
That being said, it should be a small amount. 90% of your crypt assets should be stored offline in a cold wallet like the Ledger Nano.
5. Keep your PC virus free
Think twice about downloading free software from untrusted sources, most of the time they’re malicious.
There are many ways to get a computer virus, but some of the most common include downloading infected files or programs, opening email attachments from unknown or untrustworthy sources, and visiting websites that contain malicious code.
Don’t click on suspicious links.
6. Double check the receiving address before sending
When sending cryptocurrency, it is important to take precautions to ensure the safety of your transaction. Here are a few tips to keep in mind:
-Check the address you are sending to carefully. Make sure it is the correct address for the recipient.
-Never send cryptocurrency to an online exchange. Exchanges are often hacked, and you could lose your coins if the exchange is compromised.
-Be aware of phishing scams. Scammers may try to trick you into sending them your coins by posing as a legitimate website or service. Always double-check the URL before entering any information or sending coins.
7. Don’t brag on social media about how much crypto you have
People seem to forget that you can be physically robbed of your crypto.
If you go on social media and boast about how much you have in crypto, you can be targeted by criminals and be forced to transfer your crypot to their address.
It happened to this guy.
Source: Business Insider
Make sure to share this guide with friends and family you know who are involved in cryptocurrency. It will save them lots of pain.
But don’t forget to implement these security tips for your own crypto assets.