Cryptocurrency gives you autonomy over your own finances. This is fantastic, but there is a caveat:
With great power comes great responsibility!
In other words, if you’re not careful, you can lose everything. Coinmama doesn’t want that for you, so in this article we will equip you with the knowledge required to keep your crypto safe.
Passwords
It’s easy to become lazy and fall into bad habits when it comes to choosing and storing your passwords, but hackers have become pretty sophisticated in their methods in recent years, so getting lazy could prove costly. Follow these simple tips to enhance your password security:
Do:
- Use a password manager (e.g. Google or Last Pass)
- Change your password regularly (every 3-6 months is recommended)
- Use a combination of uppercase and lowercase
- Use letters, numbers, and symbols
- Aim for a minimum of 8-16 characters
Don’t:
- Make short or easy-to-guess password e.g. “Dave12345”
- “Hide” your password somewhere obvious like a “My Passwords” folder
- Use dates relevant to you or your family
- Re-use passwords on multiple platforms
- Share your passwords
2FA Security
Two-factor authentication is a must. Phone-based authentication is preferable to email – it’s more secure. Authenticator apps like Google Authenticator or Authy are a great option. Text message (SMS) authentication should be avoided as it leaves you vulnerable to SIM swaps, which is when a hacker convinces your phone provider to switch your number to a new SIM card in order to gain access to your 2FA.
Self-custody
This means you control the private keys to your assets. The beauty of this is that you are responsible for your own crypto just as Satoshi Nakamoto intended.
There are plenty of options when it comes to offline wallets. In fact, the Coinmama Wallet ranks among the safest ways to store your digital assets. It’s non-custodial so you manage your own private keys. This means you’re in charge and you don’t need to trust anyone else. You do not need a Coinmama account to use the Coinmama Wallet, but if you do buy crypto with us, the Coinmama Wallet is a great place to send the coins! You can download the Coinmama Wallet now – it’s available on iOS and Android.
Another option is cold storage. This method completely removes the connection between your crypto and the internet. The safest way to do this is with a hardware wallet. These are physical devices that store your private keys and connect to your computer (usually via USB) when you want to access your assets.
Using cold storage means your private keys are never connected to the internet so they are not vulnerable to malware or other similar attacks. Even if someone steals your hardware wallet, the device is still PIN protected and recoverable.
Backups
Backups allow you to recover your wallet in case you ever lose access or forget your passwords. Mnemonic seed phrases are a list of words entered in a specific order and they’re usually given to you when you first set up your wallet.
Setting up your wallet and the storage of your seed phrase is incredibly important. Do not save digital copies of seed phrases. Don’t keep them on your computer. Don’t store them in a password manager. Write them down with a pen and paper (hardware wallets usually provide a card for this). Then, store them in a safe location. Safe deposit boxes are a good option here. Under your pillow is not.
Never put your seed words online. The only time your seed phrase will be needed is when you are restoring a wallet. With hardware wallets, this is done directly on the device.
Avoid Viruses
This is obvious, but it’s doubly important when it comes to crypto. Viruses, malware, fake wallets, phishing for private keys. The list of ways crafty criminals can access your digital assets is ever-growing. It’s best practice to keep your devices clean of junk. Install antivirus software. There are plenty of excellent options out there, many of which don’t cost a cent.
On a related note, always exercise extreme caution around using stuff like public WiFi and, in particular, remote access software. Anything that allows someone else to access your computer creates huge risk. Wherever possible, don’t use these programs on devices containing your wallets.
Use Multiple Wallets
The well-known adage of ‘don’t put all your eggs in one basket’ comes to mind. Don’t use just one wallet address. If the wallet somehow becomes compromised, you’ll lose everything. It’s best to have numerous different wallets generated with different external addresses for each. Using one-time and unique addresses for transactions is also an option if you want to enhance privacy. While measures like this may seem laborious or inconvenient, they might just make all the difference.
Double Check the Wallet Address Before Sending
One of the easiest ways to lose your crypto is to send it to the wrong address. Make absolutely sure you have pasted the correct address. Oh, and never enter the address manually. Too much room for error. We’re all human after all.
On a related note – and this is particularly applicable if you are transferring large amounts – sending a smaller test transaction to make sure the funds arrive safely is a top tip. At least if something goes wrong, you just lose the smaller sum rather than the whole lot.
General Safety
Amidst all the sophisticated ways a hacker might try to access your crypto, don’t lose sight of the fact that thieves regularly try to steal crypto the old fashioned way; through violence. To reduce the risk of this happening to you, don’t go screaming from the rooftops about how much crypto you own. That’s right, no flexing online about how your fat bag of DOGE has gone 10x.
Final Thoughts
It’s easy to become a little bit lazy when it comes to security and to think “it will never happen to me”, but if 2022 has taught us anything it’s that no exchange is safe. Self-custody is the smart choice. Coinmama has been around for long enough to experience disasters from Mt. Gox in 2014 all the way to FTX in 2022. Trust us; the pain of losing your crypto will be far worse that the inconvenience of taking the proper security precautions.
Stay safe!