Protect Virtual Currency & Hack-Proof Crypto Holdings
The recent rise in the value of Bitcoin has created a flood of new users, some of whom are less than vigilant about protecting their holdings. There are plenty of misconceptions surrounding cryptocurrencies and how they work, and these inaccuracies can compromise the integrity of the accounts in question.
Whether you are new to the world of cryptocurrency or an early adopter with profits already locked in, it is important to be proactive about protecting your accounts. Cryptocurrencies are not like other forms of payment, and the risk of loss, theft and hacking is much higher. If you want to keep your virtual stash safe, you need to take the right steps, starting with the ones outlined below.
Be Careful Where You Shop
Face it: some of the merchants who accept payment in cryptocurrency are less than reputable. For many years, Bitcoin was the payment of choice, for hackers, ransomware writers and sellers of illicit goods on the dark web. When the government took down Silk Road, they uncovered a treasure trove of Bitcoin payments, information the authorities are still using in criminal prosecutions.
Even if you are not scouring the dark web for illegal goods, it is easy to get taken in by a shady merchant. Revealing your cryptocurrency information to those merchants could leave your entire account at risk, so be careful where you shop. There are plenty of mainstream merchants that take Bitcoin and other cryptocurrencies, so protect your virtual cash and stick to names you know.
Getting Locked Out Of Cold Storage Vs. Risks Of A Crypto Exchange
Hacking attempts at popular cryptocurrency exchanges result in much ado, and those headlines are probably frightening. Hackers are targeting cryptocurrency like never before, and each price spike only increases the danger.
The danger of exchange hacking has led many holders of cryptocurrency to use cold storage instead, storing their virtual coins in hardware-based wallets that are not connected to the internet. Some go a step further, recording their private keys in paper form or even etching the information on metal plates.
At first blush, cold storage may seem like the perfect solution, but this strategy comes with its own set of risks. Since cryptocurrencies are decentralized, there is no central authority available to recover passwords, find private keys and recover lost information. If you lose your password or forget your private key, you are most likely out of luck. People lose millions of Bitcoins in this manner, and some experts feel the risk of personal cold storage is higher than the risk of keeping the coins on an exchange.
Check Your Account Frequently
When cryptocurrency owners hear about a security breach, they head to their exchanges in droves. At other times, owners of cryptocurrency often take their accounts for granted, failing to check them unless they plan to make a purchase or initiate a sale.
There are never any guarantees when it comes to cryptocurrency, but promptly finding and reporting unauthorized access might just save your stash. Many exchanges offer insurance against such events, and many cryptocurrency users have already recovered their lost funds. By checking your account frequently and reporting any suspicious activity, you can do your part to keep your virtual coins safe.
Have A Backup Plan
Whether you store your cryptocurrency on an exchange or locally, it is important to back up every piece of the access puzzle. From your private and public keys to your passwords and codes, everything you need to access your stash of virtual coins should be backed up and stored securely.
Start by printing out everything, from the password to your exchange account to your private keys. Store that information in a safe deposit box or other secure location. Better still, make several copies and store them in various places, preferably spots you and your family members know about, but no one else does.
You can also make digital backups of your cryptocurrency access information, but not in any way connected to the internet. Backing the info up on a thumb drive and storing it in a secret location is a good place to start – just make sure you make several backups.
Protect Virtual Stash & Hack-Proof Crypto Holdings Conclusion
The beauty – and the danger – of cryptocurrency is its decentralized nature. Without a central depository for passwords and private keys, losing a backup could permanently lock you out of your account. You cannot be too careful when it comes to protecting your cryptocurrency, from backing up your backups to checking your account on a regular basis.