It’s no longer news that Crypto assets are fast gaining traction in today’s world. The amazing word “Crypto” has completely altered the way we view global financial systems and money, revealing the power of blockchain technology. However, with great power comes great responsibility and part of that responsibility is knowing how to protect your crypto assets.
As a Russian cybersecurity firm, Kaspersky recently affirmed, hacking of crypto accounts is on the rise. “We should expect more fraud, targeting mostly BTC, due to this cryptocurrency being the most popular one,” they stated.
Predictably, the popularity and surge in BTC prices and the upcoming Ethereum mean that virtual currencies often become a target for hackers that want to take advantage of these valuable and appreciating assets.
According to data released by CipherTrace Cryptocurrency Intelligence, crypto theft for last year stood at $1.9 billion in 2020, down from $4.5 billion in 2019.
In 2018, cryptocurrency crimes were about $1.7 billion in value, according to CipherTrace’s annual Crypto Anti-Money Laundering and Crime Report. This number surged by almost 165% year-over-year to $4.5 billion in 2019.
This data makes it crucial for you to protect your crypto assets and avoid falling victim to cyber hackers.
The most important process in securing your crypto assets is choosing a crypto wallet. This wallet works pretty much like a traditional wallet, save for the obvious fact that it is a digital wallet. Some popular examples are MetaMask, Trust wallet, Electrum, and Exodus.
A crypto wallet is used in keeping the private and public keys required to buy your crypto assets, thus enabling digital signatures to approve every transaction. It is safer to keep your crypto assets in crypto wallets as crypto exchanges can fall prey to cyberattacks and theft.
A private key (almost like a real key) unlocks your crypto assets from your crypto wallet.
You must also understand the power of your private key as losing such keys to cyber-attacks or carelessness will result in losing access to your funds. If someone else learns your key, they can spend those funds.
It is also critical to understand that many crypto wallets have just one private key. They are hierarchical deterministic (HD) wallets, meaning they can hold a lot of different keys. All that is required of you is knowing the seed phrase, a collection of words that can be used to generate those keys. This may resemble the following:
Unless you intentionally prefer to use a single private key, you’ll probably be asked to back up a seed phrase when creating a crypto wallet.
To protect your crypto assets, ensure you work with reputable cryptocurrency wallets, exchanges, brokerages, and mobile apps and avoid sharing your secret key with others.
Crypto trading platforms like FTX derivative exchange provides multi-level security features for its users, as Google authenticator is available to protect your withdrawals on exchanges. Also, it’s very important to whitelist your withdrawal address to prevent loss of funds.