Protecting a cryptocurrency wallet from hacking: 19 recommendations and ways to use cryptocurrencies safely
The only thing that stands between the cybercriminals and your cryptocurrency is the security levels you set. Some people think that it makes no sense for a hacker to attack them, but this does not mean that one should be frivolous about protection. Often, attackers do not attack someone specific, but a lot of people at once. And if there is a loss of money, then no one can return it to you, not even Satoshi himself – this is how blockchain technology works.
Therefore, do not neglect prevention. In this article, the editorial staff of Btcnewsweb.com will consider 3 levels of crypto wallet security. If you cope with them, then you will be able to minimize the risk of losing your funds.
First level: basic rules
These are the most basic safety rules that absolutely everyone should know about. They don’t give a 100% guarantee, but if you don’t use them, it’s like throwing money down the drain. So, the components of the first level:
- Make sure that the twelve-word seed phrase is preserved. The seed phrase is the main key to a cryptocurrency wallet. Anyone who possesses it will be able to get free access to the wallet and all the finances stored in the account. Therefore, take care not to write it down in a conspicuous place.
- Be careful with private keys. In terms of functionality, a private key is similar to a seed phrase, but it only gives access to a specific type of asset. For example, all Ethereum coins are controlled by the private key from Ethereum. Bitcoin and other cryptocurrencies operate with a mass of private keys, each of which controls one address. And stealing one of them allows you to hack all the rest. Therefore, keep these keys as safe as possible.
- Come up with a strong and unusual wallet password. Try to keep it different from any other passwords you use (from email, games, social media, etc.). Use at least sixteen characters, better random ones. Add various punctuation marks as well as numbers.
- Use a licensed OS and applications, update them regularly. First, it concerns the wallet application. Update your software in a timely manner, it is very important in general for the safe use of the device.
- Do not go to suspicious resources and never download files from dubious sources. They may contain viruses and spyware that steal passwords.
- Don’t brag about your savings, especially in public. Many YouTube bloggers fell victim to hacks because they showed their savings in the video, while not really thinking about the safety of the wallet. Don’t make yourself a tidbit for intruders.
After completing these steps, you have secured your wallet from 50% of attacks.
Second level of security
- At this stage, you can already feel relatively calm and start taking more serious measures:
Use a hardware wallet. No computer will be 100% protected under any circumstances. Therefore, experts strongly advise using a hardware wallet such as Trezor or Ledger.
- Activate 2FA for all accounts. Two-factor authentication is usually done via a smartphone. There are two requirements for authorization using this method: a password and a phone number. The smartphone must have the Google Authenticator application or similar installed. But using 2FA via SMS or e-mail is not so safe.
- Use a password manager. When you come up with a new password for each account on the Internet, you will soon get confused and start repeating yourself. A program that acts as a password manager will avoid this. For example, KeePass:
- Use a firewall and VPN. A firewall must be installed on your device. It protects the network from unwanted access from the Internet. VPN provides additional privacy by encrypting messages and preventing third parties from tracking your activities.
- Use antivirus software and update it regularly. Antiviruses add another layer of protection. Don’t rely on them alone, though.
- Keep 12 words of the seed phrase safe. Yes, this has already been said, but it will not be superfluous to remind how important it is. It is best to write the seed phrase on a piece of paper and hide it in a book or in a closet behind old things. And another copy – in the parents’ house or somewhere in the yard. Thus, even if one leaf burns in a fire, you will have a second one. Laminate them, not in a store, but at home – this can be done with transparent tape or a book cover.
By doing this, you will secure your crypto wallet by 80%.
The third level: the maximum level of protection of the crypto wallet
At this level, really serious measures are used that practically exclude the possibility of an attack by intruders on your wallet:
- Ensure maximum password security. You have already changed the important passwords, now it’s time to refresh the others and enter them into the password manager. A password of up to 64 characters with 10 numbers and 10 punctuation marks is ideal. It would theoretically take billions of years to crack such a password using brute-force attacks.
- Memorize the passwords. If you want to significantly increase the security level of the wallet, then do this: remember the last 4 digits from the most significant passwords, and then remove these 4 digits from the password management program. This will protect the wallet in case the program is compromised in some way. Just make sure you can actually memorize them tightly.
- Protect your network. Network security settings are often overlooked when securing a device. Don’t make this mistake: they can do a great job of deterring malicious activity.
- Save the offline backup link. This item refers to professional protection and is suitable for users of the Exodus.io wallet. First, save the letter with the link to the directory on the USB flash drive, then delete it from the mail and empty the trash. Next, encrypt the created folder and come up with a password that is as complex as possible. Such a measure will make life difficult for hackers, even though the letter deleted from the mail still remains on its servers.
- Encrypt your hard drive. This procedure will keep your information safe if it is stolen or lost. Never forget that encryption cannot protect your data once it has been decrypted, that is, while you are using your computer. Therefore, configure the computer to lock after 10-15 minutes of inactivity or when closing the lid from the laptop. Agree that it makes no sense to encrypt your hard drive if your computer is constantly accessible to potential intruders.
- Install the Metamask or PhishFort extensions in your browser. They will display a warning if you go to a potentially dangerous site that is on their blacklist. PhishFort is an anti-phishing crypto service used by well-known companies in the industry, including Exodus. And Metamask is an extension for secure work with the blockchain, as well as with various wallets and cryptocurrency exchanges.
- Check the safety of the seed again. It is so important that it is impossible not to return to it. Place one copy of the slip in a fireproof safe at home, and take the other to a safe deposit box. Use security technology like Crypto Steel instead of plain paper.
After these measures, your crypto wallet is guaranteed to be protected from 95% of attacks.
Actions for professionals
Some of the tips offered at the last level require a lot of technical knowledge of computers and networks. Before applying any of them, make sure you clearly understand what you are doing:
- Most powerful password management. Use your local area network to synchronize your password manager between computers in your home so you don’t have to use servers located on the Internet.
- Again about the seed phrase. Never store it in a digital environment, use the previously given offline storage guidelines.
- Network protection. Make your local network virtually invulnerable. It is difficult to give detailed instructions here, as the parameters vary greatly depending on the routers and VPN providers used. Generate several different SSIDs (Service Set IDentifier, i.e. network names) on the router. One for most of the computer equipment in your home, the second for guests, the third for a separate computer for the crypt (more about it later). Make sure none of them are linked to the other, and all have unique passwords (except perhaps the guest network).
- Use advanced VPN connection options such as TOR VPN or DoubleVPN. However, this measure can significantly reduce the speed of the Internet.
- A separate computer with a crypto wallet. This is a computer on which nothing is installed except a wallet, and to which the Internet is not connected. This method is very effective, but only if you have previously paid attention to all other measures.
With these actions, you have secured your cryptocurrency savings by 99.9%. This is the highest level of protection, and now no hacker can break through such a defense. If you yourself do not commit any unreasonable actions, then you can be absolutely sure about the safety of your wallet.