The cryptocurrency world is growing so fast that it’s challenging to keep up. Between 2021 and 2022, the volume of crypto transactions skyrocketed by almost 600%. It’s not hard to see that cryptocurrency has surged out of the niche corners of finance to be an increasingly vital aspect of mainstream portfolios.
But in sync with the boom in crypto transactions has come a wave of increased illegal activity. The number of fraudulent transactions and scams increased from just under $8 billion in 2020 to more than $14 billion in 2021.
It’s not hard to see the pattern. As cryptocurrency increasingly becomes more mainstream, digital finance's crime rate rises. Most commonly, cybercriminals will utilize tried and tested tactics ranging from malware and phishing tactics to extracting the secrets of hard drives by hacking passwords, pins, and seed phrases.
One of the main ways many investors counter these threats is by holding the bulk of their crypto investments in secure hardware wallets that are impossible to access without an internet connection.
The bulk of the victims of illicit transactions and scams target investors who use 3rd party wallets, platforms, or services. While using these can bring a wide range of advantages, they also present significant risks if not handled correctly.
But regardless of how experienced you might be with cyber security tips to keep your crypto safe, online criminals are always keen to expand their range of illicit tactics. Each year sees numerous innovative methods that online criminals have concocted to penetrate security systems and steal people’s hard-earned crypto effectively.
So to stay ahead of the game, It is increasingly vital for crypto investors to stay informed of the latest tips to create a foolproof crypto wallet security environment and keep your investments safe.
Today, we’re going to provide you with a gripping insight into staying safe in online crypto trading. We’ve created a straightforward, no-nonsense guide that is easy to follow. First, let’s delve into the main issues most digital crypto wallets face in an increasingly hostile online world.
Mobile Crypto Wallets Are Popular, But Can They Be Trusted?
Firstly, let’s talk about the critical component of online crypto security: Cryptocurrency wallets. They can be broken down into three different types: Online wallets, mobile wallets, and desktop wallets. Each one is susceptible to attack from online criminals for a wide range of reasons.
Due to the world becoming increasingly mobile, the most popular form of a digital wallet is the mobile wallet. They’re incredibly convenient for staying up to date with investments while on the move. They’re also straightforward for criminals to hack into due to several security weaknesses.
When new investors choose a mobile wallet to invest their hard-earned crypto into, they often neglect to do their due diligence to find out if the wallet they are using is trustworthy. For example, it can be rooted, jailbroken, or have dangerous reverse-engineering tools installed. If they do, this will make it exceptionally simple for a hacker to extract the wallet's contents in mere minutes.
Most people know about notorious forms of attack such as the Pegasus malware or Trojan-horse methods when using a computer. Crypto mobile wallets hosted on iOS/Android Apps are prime targets for similar attacks due to many apps leaving the sensitive data of their users stored in their memory.
Ok, how can I safely use a crypto wallet and keep my funds safe from cunning cyber fraudsters? I hear you ask. Don’t worry; we’re going to cover that next. So keep reading!
So, How Do YOU Make a Crypto Wallet Secure?
We’ve been around the block a few times and learned some hard lessons about where the lack of security protocols can lead when it comes to crypto wallet security. So in this section, we will share some vital advice that can help you make a crypto wallet more secure.
1 - Don’t Neglect To Use a Cold Wallet
First and foremost, one of the most reliable methods of crypto security is the use of a cold wallet. Despite being plugged into the crypto world, they are offline and completely encrypted. Compared to hot wallets, the chances of a successful cyberattack on a cold wallet are slashed dramatically.
One of the most popular forms of a cold wallet is a paper wallet. With this variety, public and private access keys are noted down on paper or hardware wallets. In doing so, this ensures that access is kept entirely offline and safe from online hackers. Physical thieves, however, can still steal your keys. So it’s your responsibility to keep them safe and hidden.
2 - Don’t Use Public Wifi Networks
When traveling or low on data, it’s tempting to log into public wifi networks. Especially when they’re password-free, you must stick to secure internet connections and avoid public Wi-Fi altogether to keep your data and finances secure.
As an additional layer of security, always use a virtual private network (VPN). Using a VPN, you mask your IP address and location to prevent hackers from identifying your location. In addition to providing a significant amount of protection against online criminals, you can also gain access to various online content that is only available to certain countries and regions of the world.
3 - Spread Your Portfolio Across Multiple Wallets
You’ve heard the term: ‘’Don’t keep all of your eggs in one basket’’, right? Well, that applies to cryptocurrency too. As the risks posed by cybercriminals are so varied, so should your preventive measures. Keeping your crypto portfolio spread across different wallets is vital.
4 - Make Use of Two Factor Authentification (2FA)
There was a time when a text message confirmation was enough to provide two-factor authentication. But not anymore. It has been proven time and time again that this method has significant security flaws when presented with increasingly common forms of attack like SIM swapping and phishing attacks.
So you need to choose an alternative form of two-factor authentication. Thankfully, most prominent crypto exchanges are fitted with 2FA software that is very efficient and safe. The way that it works is simple.
Two-factor authentication uses access control software that requires the user trying to log in to their account to complete two different forms of verification of separate devices. Such as a separate pin you know off by heart or via an app on a smartphone that generates a unique code that resets every few seconds.
5 - Backup Your Information Offline
Not all crypto is lost through fraudulent activity. Millions are lost through human error too. It can be challenging to keep track of your pins, keys, and login details. So it's also vital to keep your details, and evidence that the accounts belong to you backed up offline where they’re safe from hackers. Just make sure they’re safe from physical thieves, too.
Final Thoughts: How Safe is Your Crypto?
To sum up this article on crypto security, it’s clear that the world of cryptocurrency investing is increasingly under threat from cyber criminals eager to seize the hard-earned investments of honest traders. Thankfully, there is a wide range of tactics you can use to try and stop them.
Disclaimer: Due to the ever-changing world of cybercrime, there is no watertight method to prevent all attacks. This article is intended to provide basic techniques that can alleviate some of the risks presented to crypto investors worldwide, but it is not guaranteed to be foolproof.