With the third Bitcoin halving set to take place in May this year, investors can’t help but feel excited and hopeful that this coin will record a massive growth just like after the 2016 halving.
While such news encourages individuals to buy Bitcoins in the hope of coming out ahead, they also entice venomous hackers who see the opportunity to steal funds from users unaware of Bitcoin safety.
Hackers are coming up with inventive ways of stealing funds from new investors who still don’t know their way around the system and are prone to making mistakes that make their Bitcoins vulnerable to theft.
If you are new to Bitcoin, here are some of the ways to ensure the security of your Bitcoins in 2020.
# Be on the Lookout for Phishing Attacks
The internet is full of people who pose to be someone else. These people use a fake email and website to trick you into sending them your Bitcoin wallet credentials.
This method is known as phishing attacks. The email could be prompting you to click on a link to update your Bitcoin wallet, or about someone threatening to send compromising information or pictures of you to your contacts.
The best thing to do when you receive an email like this is to ignore it and not respond at all.
Once they get a response from you and a conversation is initiated, the scammers are likely to move into a more acute stage of the scam.
So, it’s better not to act on the email at all. Instead, verify with your exchange if they have sent such an email.
# Consider Cold Storage
Your private key is your crypto’s life jacket and should be kept a secret to anyone you consider untrustworthy. To keep your Bitcoins safe, consider storing your private keys offline on hardware devices so that no one will be able to access them.
This is called Bitcoin cold storage. An example is a computer without an internet connection, which will make it impossible for you to fall victim to hackers or malware attacks.
You can also safely store your private keys on special hardware, identical to a USB key or a piece of paper.
# Do Not Access your Wallets from Public Computers
No matter how tempting it might be, resist accessing your Bitcoin information on a public computer that is used by many people throughout the day.
Did you know that malware installed through public Wi-Fi can divert your Bitcoin transactions from their expected destination into someone else’s account?
Always use your own laptop or computer to check your Bitcoin balance, send or receive coins, ensure your password is secured, and that current malware protection is enabled.
Also, make sure that the computer is not used by anyone but you.
# Hide your IP Address Using a VPN
When you make a Bitcoin transaction, you are basically sending a message to the entire Bitcoin system.
Someone handling a large number of computers in the Bitcoin system might be able to tie your activities to your IP address and deanonymize all your Bitcoins.
Skilled hackers can even use the information contained in your Bitcoin transfers to expose your IP address—which may reveal your location and who you are.
You can avoid all the above by encrypting all your transactions using a secure VPN. It is important that you keep all your Bitcoin transactions via encrypted channels:
- Use Tor and VPN when possible
- When searching for Bitcoin addresses, ensure all the websites you are visiting have HTTPS enabled
- Encrypt your communications using PGP and OTR
# Ensure your Software is Up-to-date
Just like any device or software, if you don’t update it, you are vulnerable to hacks. Running your wallet on non-updated bitcoin software makes you a soft target for cybercrimes.
When a software update happens, it almost always has an improved security system in place, thus increasing the security of your Bitcoins.
You should, therefore, always ensure that your antivirus software and other security options are up-to-date.
The saying, “don’t put all your eggs in one basket” also applies to the safe-keeping of your Bitcoins. By backing up your Bitcoin wallet as often as possible, you are making sure that you are protected in case of hardware failures, human errors, and other unforeseen accidents.
You will also be able to restore your wallet if your phone or computer gets stolen.=
It is, therefore, important to backup all your wallets and to store the backup at different secure locations (such as on CDs, hard drives, or USBs). You also need a secure password for the backup.
# Protect your Identity
Brutal robbery attacks on Bitcoin holders are increasing.
It would be smart to keep your investment activities and holdings a secret. Among some of the most recent cases is a 38-year-old Bitcoin trader in the Netherlands who was tortured using a drill for more than one hour.
While the reasons for the robbery are not known, it was disclosed that the victim was a wealthy man, involved in Bitcoin trading.
The nature of Bitcoins and other digital assets makes them immutable, easily transferable, and somewhat anonymous.
High-profile investors with a sizeable amount are easy prey for both real-life burglars and online scammers. It is, therefore, good to remain anonymous and private with your crypto investments, both for your wellbeing and for the safety of your coins.
Do not disclose any personal information that could be used to access your accounts like passwords, email addresses, PINs, etc.
# Use an Escrow Service
If you want to sell or buy something and you are suspicious of whoever is on the other side, it is advisable to use an “escrow service.”
This way, the payments are sent to the escrow service as the buyer waits to receive their item. As the seller is at peace knowing that the money is secure with the escrow service, they send the agreed product.
Once the buyer gets the item, they inform the escrow service to complete the payment. In this case, the security of both the seller and buyer is guaranteed.
# Encrypt it Using a Strong Password
The weakest defense to your Bitcoin wallet is a weak password. Almost everything on the internet can be protected from inappropriate and unwanted access by using a strong password.
That said, many people make the mistake of using the same password for multiple accounts, from email to shopping platforms, to social media, which makes them vulnerable to hacking.
If you use one password for all your accounts, all it takes is for the scammer to gain access to the password of one platform and they will be able to access your email account, which will give them entry into everything else that you do online.
It is vital that you use a secure password to protect your virtual wallet.
Think of a password that combines lowercase, uppercase, symbols, and numbers and choose them all at random. It is also important that you regularly change the password to your wallet—and by extension, passwords to all your online accounts.
# Use Two-Factor Authentication
Even with a secure password, an extra layer of security is still necessary for crypto security. Two-factor authentication is that additional line of defense.
It means that even after entering transaction details or a password, the system will send a verification code to a trusted device. Since they won’t have access to your other device, hopefully, they won’t be able to do anything even with the password.
Biometrics on a smartphone, for instance, helps ensure that even if someone manages to get hold of your phone, they won’t be able to access your wallet without your fingerprint.
# Enable Multi-Signature
When you enable multi-signature, it means approval is required from a certain number of people (like 3-5) for a transaction to be completed.
In the case of Bitcoin wallets, multi-signature, just like two-factor authentication, means that even if the cybercriminal has a private key, they will still need an extra key to complete the transaction.
This limits the risk of theft as one server or controller cannot carry out any transactions like sending or withdrawing Bitcoins.
The people who are allowed to transact are decided from the word go. When one of them wants to transact, they will need approval from others in the group.
The only downside to multi-signature is that it can only be effective when you have someone that you can trust with your Bitcoin keys.
After investing resources and time in buying digital assets, you really want to be sure that they are locked somewhere safe you can access them whenever you want to.
The above suggestions should help you secure your Bitcoins in 2020 and prevent you from being one of the victims losing their investment in broad daylight. Happy mining!