- Hackers or malware gaining access to your Bitcoins can clean out your entire wallet in a matter of just seconds. Unfortunately, you can't turn to any financial authority for reimbursement when this happens – not even the FDIC.
- Hacker Noon says we place ourselves at risk by storing our wallet and passwords in the same virtual file.
- Ransomware is a type of malicious software that's designed to block access to a computer system until you pay a sum of money. These attacks are knowingly staged against Bitcoin wallets today, especially what E Security Planet calls “hot” wallets – wallets on computers connected to the Internet.
Always Secure Your PC
- Have several good backups in place – both on site and offsite. While your computer hardware and software are replaceable, your data isn't. It takes less than 16GB to backup your wallet, which means there are lots of inexpensive ways to do so. However, you don't want to just depend on something like a USB drive because you don't know when or if your home or business may burn down. This is why offsite backups are also really important. Whether you place a USB drive in your bank's safe deposit box or create an online backup to the cloud, you can't overlook the importance of doing so.
- Never let anyone manage your private keys. Even though some companies offer their own encryption, you shouldn't fully trust it. Instead, only backup files that you've encrypted yourself.
- Always encrypt your business' sensitive data, whether it's cryptocurrency or something else. This simply means you're creating small, virtual hard drives that are at least a few GB. It's best to choose double or triple encryption here along with a really strong password.
- Make sure you always use a core wallet, especially for cold storage – holding your coins offline to use later. Even if you don't open this wallet for a year it should remain compatible with newer versions. This is why you'll find that core wallets are simple, stable, and conservative. The last thing you want is something fancy that you find causes your coins to evaporate into thin air.
- Never use a mobile wallet for storing a large amount of crptocurrency. While they look like they'd offer you a great way to carry some extra spending cash with you, this isn't where you want to spend more than $20 - $100. This simply turns your smartphone into a small, mobile bank, which will make you anxious as you continually check to make sure your phone is still with you. If you lose your phone, or it's compromised, your funds are gone forever.
- Always use two-factor authentication. This is even more important when you're trading on exchanges. While you'll need to add some software to your phone to make this work, it doesn't take much time. The exchanges simply prompt you for a code from your authenticator program when you log in to it. This also protects your withdrawals by prompting you for a code at this time as well. Since the codes change every 30 seconds, it's no good to a hacker who manages to capture it.
- Never leave a lot of coins in an exchange. If you're using a buy and hold strategy, don't leave any coins there at all. However, there will still come a point when you need to trust the exchange. The best strategy here is to split your funds between multiple exchanges – 5 – 6 of them at once is recommended. Nevertheless, these exchanges are very secure.
- Staying safe online may sound redundant but you don't want to click unknown links or enter sensitive data on websites without https security. Never surf malicious sites, use flash players, or download files you aren't sure of. Always keep your antivirus protection updated – Hacker Noon says pro versions are best. Believe it or not, following these “rules” also keeps your cryptocurrency safe.
- Only use messaging apps that have an end to end encryption. While the free versions work great, you never know who's snooping behind them. Today these snoopers have really sneaky technology that allows them to bypass free antivirus software programs. On the other hand, pro versions are more secure so you're not as likely to get hacked and have your desktop wallet emptied.
Understanding the risks your Bitcoin currency faces is the first step in finding a way of securing it. All of this is important today because cryptocurrency is growing in popularity today. This means that every business needs to start leveraging it on their behalf. However, you only want to do so if you're also able to leverage the use of cyber security software at the same time.