As crypto prices continue to soar higher every day, the need to protect them grows as they become a prime target for hackers. Unfortunately, when a cryptocurrency wallet or trading account is hacked, an investor may not have any possible course of action legally since crypto coins are unregulated, and footprints of hackers can be eliminated.
According to Chainalysis blockchain analysis, cryptocurrency crime hit a new high in 2021, with an estimated $14 million channeled to illegal online addresses. This is a 79% increase over the $7.8 billion in illegally obtained cryptocurrency in 2020. If you’re a cryptocurrency investor, knowing how to protect your investments is the first step to remaining profitable.
Here are a few tips to help you protect your investment.
Know Everything About Your Wallet
Be aware of how your wallet is used in transactions to ensure that systems and networks are not compromised. You also want to make sure you have physical protection and a backup plan to salvage your wallets. Consider using cold wallets that do not use the internet to minimize risks. Store your private keys in a cold wallet as they are encrypted. Hot wallets are more prone to cyberattacks due to internet connections.
Secure Your Connection and Digital Wallet
While online wallets are more popular, faster, and reliable, they attract the attention of hackers. They should never be used to store all your cryptocurrency. Store public and private keys in secured accounts and enable multifactor authentication whenever possible. When using the internet to make crypto transactions, always use a secure internet connection. Even if you’re accessing your home network, use VPN for additional security.
Work With Reputable Cryptocurrency Brokers and Mobile Apps
Take time to review the platforms you intend to work with to understand how your data is protected. Mobile applications, exchanges, wallets, and brokerages are all at risk of loss because of cyberattacks. Before making any financial investments, inquire about their best security practices, such as mandatory multifactor authentication. Trading platforms such as Rubix invest heavily in security through licenses, insurance, and other security practices. Whether investing in one or multiple cryptocurrencies, it’s essential to create and manage passwords to safeguard your coins.
Have Multiple Wallets
You can have as many wallets as possible. That means you don’t have to save all your cryptocurrencies in one wallet. Use one wallet for daily transactions and keep the rest in a separate wallet. This will protect your finances and mitigate losses in case of a security breach in one of the accounts.
Change Your Password Frequently
Avoid using the same password in your cryptocurrency accounts as crypto services are a prime target for cyber-attacks. Create a strong, unique password every time you open a new account and have a system in place to change these passwords frequently. If you have multiple wallets, use separate passwords and schedule monthly or bi-weekly changes. To do this efficiently, consider getting a password generator tool that can remind you to change the passwords on time.
Use Two-Factor Authentication
Two-factor authentication or multifactor authentication are some of the simplest and most reliable ways of protecting your accounts from hackers. They involve entering a 4 to 8-digit code sent to your phone or email. The code changes every 30 to 60 seconds, making it difficult for hackers to access it.
Secure Your Personal Devices
Your devices are also at risk of cyberattacks. Update software and systems in your PCs, tablets, and cell phones to prevent them from viruses and malware. Use a powerful anti-virus and firewall to enhance your device’s security and prevent hackers from taking advantage of your system’s weaknesses. Avoid clicking on suspicious links, especially on your laptop, as they could be malware, spyware, or ransomware attacks.