NOTE BEFORE READING: I have decided to never explicitly encourage anyone to invest in cryptocurrency. Although I believe in it (from both an investment and technological standpoint) and have personally invested a great deal of time and money into this exciting new market (and have seen stellar returns), I see little to gain by encouraging people I don't know to start investing. That is a decision you should make on your own, without any nudging from people who bought in earlier.The market is extremely volatile and many weak hands will lose money if they can't handle the ups and downs. I am however ok with helping people who have already decided that crypto investing and trading is for them and falls within their spectrum of risk tolerance. If you haven't purchased any cryptocurrency yet, please do your own research and never spend money you can't afford to lose.
Ok, enjoy the article and be sure to like, comment and share!
Every week there seems to be a new doomsday prophecy for bitcoin and the cryptocurrency market.
Do I believe it's all gonna come crashing down?
I can't say for certain. I really don't know what the future holds.
I can't protect your money from a crashing market but I can help you protect your investments from theft and accidental destruction with some pretty straightforward, but often overlooked advice.
I like focusing on the things that I can control and one of those things is portfolio security.
This article is NOT buying or selling advice.
This is simple advice to keep you from having your funds...
- Lost (sent into the ether or misplaced)
Ok, let's begin!
1. Always Set Up 2 Factor Authentication (2FA)
Two factor authentication is the best way to combat hacks.
When 2FA is set up, no one can access your accounts without providing a 6 digit key. These codes are always in flux (changing each time you need them) so it is almost impossible for someone to guess them and get access.
The odds of them getting it are 10^6 (or 1 in 1,000,000). I like those odds. If someone guesses the code, they pretty much deserve my coins 🙂
The authenticator that I recommend is the Google Authenticator app. There are other authenticators but I don't feel you can ever go wrong with anything form Google.
2. Never Store Coins on Exchanges Long Term (Use a Wallet)
Exchanges are not the same as wallets.
If an exchange is hacked, you can lose everything and no one can say for certain if any exchanges are actually able to reimburse members for lost coins.
For reference, read up on the Mt. Gox hacks.
You need a trustworthy cryptocurrency wallet.
There are a number of great wallets out there (click here to read more about them).
3. Avoid Sharing Information About Where Your Coins Are or How Much You Have
I know it's very tempting to brag about your coins to anyone who will listen.
Many investors quickly found themselves "crypto rich" and can't wait to tell everyone how much they made.
Fight the urge to share how much you've made. It is unlikely, but there is nothing stopping someone from breaking in and robbing you of your assets at gun point. If you think I'm being dramatic, I'm not, it happens.
Also, most people really don't care how much money we are or aren't making so spare everyone and protect yourself in the process.
4. Never Use the Same User Name and Password Twice
You shouldn't be doing this for any accounts but definitely make sure you are abiding by this when crypto is involved.
If someone steals your coins, there is no email support to help you recover your money. You are just S.O.L.
5. Avoid Unnecessary Transfers
Truthfully, you are much more likely to lose your coins by sending them to the wrong address than you are to have them stolen.
Transfers are absolutely necessary but the more of them you do, the more likely you are to slip up.
Only make transfers when it's absolutely necessary (this will also save you in fees over time).
6. Triple Check Wallet Addresses before Transferring Funds
This is a "protect yourself from yourself" tip.
One of my close friends and partners accidentally sent 15 ETH to the wrong wallet.
At the time of posting, that is a $15,000 mistake (at the time it wasn't so bad since ETH was valued at just over $150 a coin).
Before transferring, check the following...
- Ensure you are sending the proper coin to the proper wallet type. If you're sending LTC, make sure you are sending to an LTC wallet. This sounds simple but it's a disturbingly easy mistake to make
- Ensure that the wallet address is complete and matches exactly. You will need to copy and paste your keys but you should always make sure that you are pasting the right address. Sometimes I will transfer multiple coin types in the same sitting and if I'm not careful, I may THINK I copied the proper address but I'm actually pasting the last address that I copied.
You really can never check this too much so always take your time when making transfers and don't be afraid to seek support from the exchange you're transferring from if you have any doubts.
7. Don't Store Large Amounts of Coins on Mobile Wallets
Mobile wallets are fantastic for storing a "casual" amount of coins.
Think of mobile wallets like your actual leather (or velcro if you're a nerd like me) wallet or purse for the ladies.
You wouldn't carry around thousands of dollars in a regular wallet so don't do it with mobile crypto wallets!
If your phone is lost you have lost your money.
If your phone is hacked, your coins are toast as well. If you think hacking a phone is difficult or unrealistic, ask the hundreds of celebrities who have leaked naked pictures of themselves plastered all over the internet!
8. Be Suspicious (Ok, PARANOID) About Any Emails Relating to Your Portfolio or Passwords and Links Found Online
I have to admit, I have fallen for the "We need you to update your password," phishing scam.
Fortunately, this was on PayPal and not an exchange, but the same scams are used daily from hackers trying to separate you from your coins.
Always check the email sender address. If the domain has additional sub domains attached to it (for example myetherwallet.com.co) do NOT click it and absolutely do not navigate to the link and enter any passwords or usernames.
It isn't just your email that is at risk for phishing schemes. Some ads are actually phishing schemes (like this one posing as the popular exchange Bittrex.com).
Every link you click on should be formatted as "HTTPs:". The "s" is what is most important.
It is perfectly fine to be paranoid when it comes to your cryptocurrency!
9. Always Log out of Your Devices, Exchanges and Wallets When You're Finished with Them
Get into the habit of totally logging out of your exchanges and wallets once you are finished with them.
Although it's unlikely someone will physically access your account, hackers could benefit from you leaving accounts up and vulnerable.
This will mean you need to enter the 2FA more often but that is a small price to pay for protection.
10. Don't Store Your User Names and Passwords on a Password Vault Like LastPass
I absolutely LOVE LastPass but I don't recommend ever storing your crypto information there.
Really, never store all of your wallet information together. This makes it easier for a hacker to wipe you clean instead of just draining one wallet.
11. Install a Trustworthy Antivirus/Malware Protection Software on All Devices
It's disturbing what hackers can do. With a bit of malware, they can literally watch you use your computer and grab information from you.
Information like you know... WALLET PASSWORDS!!!
You should do your own research on the available softwares. Here is a good place to start via consumerreports.com.
I recommend that you actually spend some money and avoid using any free softwares. Free softwares generally make their money by selling your information.
Also, good internet security requires a team that is always one step ahead of the latest hacking and phishing schemes. This costs big money and free softwares just shouldn't be trusted to spend it.
A layered solution of the following is ideal...
This is not an area to pinch pennies.
Interested in Learning More about Cryptocurrency Trading and Investing?
This is my private and FREE Facebook group.
It is very close knit and requires an email to join.
The admin are all highly successful investors and share insights into what is happening, what we are doing and what we think the future holds each week.