How to Hack Proof Your Cryptocurrency Investments

by Eddie Wong about a year ago in bitcoin

Learn how to hack proof your cryptocurrency investments.

How to Hack Proof Your Cryptocurrency Investments

Ever since the big Bitcoin blowup late last year, everyone has been wanting to get in on cryptocurrencies.

However, most people just go in without doing any research on storage or purchasing solutions. Instead, they'll just buy Bitcoin and not know how to protect it in any way, shape, or form.

With this article, we're going to break down how to hack proof your cryptocurrency investments. Protect them from hackers, phishing attempts, and all the other ways your crypto can be stolen.

Don't just buy from anywhere.

Bitcoin has been around for a decade at this point, and there are many signs Bitcoin will stay around for decades. Since its inception, the digital currency has been used for underground black market trading, paying for hackers, and other dark reasons.

During that time, craftier users have learned how to scam those who may not know as much about Bitcoin and other cryptocurrencies. For that reason, you must be careful about where you spend your assets.

There are merchants out there that know how to lie and scam you out of your private keys. Even if it's for a simpler item and not some illegal property, it's still entirely possible that the merchant you're buying from is fake. Take great care in protecting your investments.

Turn account checks into a habit.

Long-term cryptocurrency holders don't check their accounts often. These investors don't trade often, so they don't see a reason to constantly keep an eye on their funds.

However, hacks can happen, and they happen often. If word leaks of a big disruption, investors will suddenly flock to their wallets. At that point, it's already too late.

That's not to mention, nearly anyone can be the target of a cryptocurrency hack. Be someone who checks their wallet often, and always make sure to use the best ones available to you.

Have multiple layers of security.

If you want to hack proof your cryptocurrency investments then you should never have a simple password to log into your wallet. Throw on two-factor authentication. Require the service send you a text before logging in. Do whatever you can to add more security layers. Google Authenticator is a two-factor authentication choice.

Yes, it may be a bit of a hassle to log in with extra layers, but that's the point. Take 15 minutes to get enhanced security. You would put the same effort into protecting a credit card in the real world, wouldn't you?

Invest in cold storage.

There are many reasons you should buy a Ledger wallet for your crypto, or another form of cold storage. These devices are similar to real-world USB drives. They keep your Bitcoin and other cryptocurrencies offline so nobody can access them except for you.

Right now, hackers are more interested in cryptocurrencies than ever before. Making it as hard as possible for hackers to get to them is worth the extra effort.

Establish recovery settings.

No matter where you store your cryptocurrency, make sure you have recovery keys in place. Write them down and store them in a physical space, and be sure not to lose them.

On top of this, make a physical and then a digital backup of your passwords and codes and reveal them to no one. Maybe even make multiple digital and physical backups to be extra safe.

Store cryptocurrencies in a safe space.

Don't store your investments on an exchange. Instead, take the time to invest in a real-world hardware offline wallet and pour your digital assets into it.

Hardware wallets never connect to the internet. These devices have multiple layers of security, and even those looking over your shoulder can't see the codes you enter in.

Plus, a hardware wallet prevents against accidental purchases and trades due to its two-button activation settings. It's a fantastic storage solution and arguably the safest space you can store digital currency.

Diversify your storage.

It's smart to have multiple wallets to diversify your cryptocurrency storage. Bitcoin and other cryptocurrencies have a variety of storage solutions.

Keep a small amount in an exchange for day trading. Then, keep the bulk of it in offline cold storage. Hardware or paper wallets are fantastic choices for doing so.

Have different passwords for each wallet, and separate recovery systems as well. Maybe even get a safety deposit box to store hardware and paper wallets. Your private keys are essential. Protect them as much as you can.

Don't buy a used hardware wallet.

Sometimes, scammers will sell a hardware wallet that isn't completely wiped. Then, when someone new uses it, they just establish their security settings and move their coins over.

However, the seller will use their recovery key to gain control of the wallet, essentially stealing all of your cryptocurrencies with nothing you can do about it.

Always buy a hardware wallet new. They are a bit expensive, but it's always smart to spend money to protect your money.

Never trust an exchange.

Exchanges are great places to buy and trade Bitcoin and other cryptocurrencies. In fact, you can even buy some with a debit or credit card. That's about it.

Once you're done purchasing and trading, storing Bitcoin on an exchange account is a terrible idea. If you think about it, an exchange is a centralized space for a decentralized asset. Keeping funds on there has them consistently connected to the internet and always at risk of theft.

Plus, exchanges can go down or even screw with your asset storage. That's never something you want to involve yourself with. Do the smart thing, and keep your coins away from an online exchange account.

Keep your investments private.

Everyone likes to share everything nowadays. One of the things no one tells you about investing in cryptocurrency is that if you want to hack proof your cryptocurrency investments that you can't share your cryptocurrency investments on social media. And don't share which wallets you have or what coins you're investing in either.

Instead, keep that information private to you and you alone. Hackers are incredibly intelligent people, and they can trace information back to you which makes you a bigger target.

In a world of constant sharing, it's often better to keep you to yourself.

Don't be one of those who jumps into Bitcoin and other cryptocurrencies because it's "cool." Instead, do your research, spend some time looking at storage solutions, and keep your investments safe. You'll regret not doing so.

Read next: Best Performing Crypto Coins to Buy in 2018
Eddie Wong

Lives in Malibu, California. Loves movies. Cutting expert, lover of Final Cut Pro 7. Parents wanted him to be a doctor, but he just wants to edit.

See all posts by Eddie Wong