You know that Ethereum is volatile, sometimes a little too volatile. But are there other risks involved? Can your crypto coins be stolen or hacked? Crypto crime is on the rise, especially since the pandemic began, so do your best to stay ahead of the scammers. There are two ways threat actors can obtain cryptocurrency: stealing it directly or using tricks to get you to hand it over. You can never be perfectly safe with Ethereum, but you can reduce the risks and attack vectors, so please continue reading to discover how to protect your crypto holdings.
Before You Open an Account on An Exchange, Set Up a Unique Email
While there are many ways how to buy ETH, centralized cryptocurrency exchanges provide a relatively easy way to convert cash into coins and the other way around. Before you open an account on a cryptocurrency exchange, it’s crucial to set up a unique email that you’re going to use for that account. If you use the same email for everything you access, the risks of an incident are higher. A malicious actor can use the email address against other resources and leverage various techniques like brute force, spray attacks, and credential stuffing to compromise your account.
Unfortunately, the crypto ecosystem is full of spammers and hackers just waiting to get their hands on your possessions. Creating a separate email address for your crypto exchange account will significantly increase your security. A threat actor won’t have access to all your activities if one of your emails is hacked. To mitigate risk, it’s a good idea to enable two-factor authentication on your email account so it can’t be accessed by anyone else. If one of the factors is compromised, your account is still safe. It can protect you against bulk phishing attacks and targeted attacks.
Store Ethereum Offline Via a Cold Wallet
A cold wallet is best for security because the private key remains unexposed, the wallet is encrypted with PIN protection, and there’s no need to worry about viruses, malware, or ransomware. If your crypto funds are offline, they can’t be stolen. The only drawback is that if you lose your password, you can lose access to your Ethereum. Buy the cold wallet directly from the manufacturer, keep the seed phrase offline, and take your crypto off the exchange. Your assets will be less liquid and harder to trade as you need to go through various protective steps to access your holdings.
Don’t Talk About Your Crypto Holdings on Social Media
Mentions by technical experts, blockchain experts, CEOs, and FinTech experts are common on social media. Many people put their money into assets like Ethereum because they yearn for a reliable, long-term store of value that can’t be taken away by the authorities. The development and interest in cryptocurrency have brought about many discussions. It’s hard for people to imagine their lives without the use of social media, so it shouldn’t come as a surprise that the crypto industry thrives online. You can easily share too much on platforms like Twitter or Facebook, which can harm your privacy and safety.
Don’t publicly brag about how many crypto coins you have because you risk entering dangerous territory. You can discuss your financial situation with immediate family or close friends, but that’s about it. Social networking sites have the greatest potential for abuse. Malicious actors snoop around social media, looking for conversations in which investors give out their contact information. Your mobile phone isn’t the only point of weakness. Threat actors can take control of your home computer, costing you thousands worth of cryptocurrency. While it may seem that information is only shared with family or friends, it can also be shared with hackers.
Use A Secure Private Internet Connection
It goes without saying that you should avoid trading on public WiFi networks or unsecured connections because you risk compromising your trading account. By using a secure private Internet connection, you prevent malicious actors from getting access to invaluable data or sensitive information. A VPN can encrypt your traffic and disguise your online identity, shielding your browsing activity from third parties, but it can also slow down your Internet speed. To ensure your trades are executed as quickly as possible, you need sufficient bandwidth to support the workload. The Internet is faster and more reliable than WiFi. To improve VPN speed, connect to a server closer to your physical location.
Don’t Keep All Your Ethereum in One Place
You can store large amounts of Ethereum in one place, but doing so will only make you vulnerable to theft and hacks. Think about diversifying among exchanges, that is, spreading your investments and holding as much as possible in cold storage. It’s absurd to think the crypto exchanges will get hacked at the same time. Not only do leading platforms offer storage services, but they also offer the chance to earn more crypto. Even if exchange-generated wallets offer security, they’re not entirely tamper-proof. Make sure you have different passwords and emails for each account to make them more secure.
To protect customers’ holdings, crypto exchanges rely on different security precautions and insurance coverage. Nevertheless, a little bit of due diligence is required on the investor’s behalf to ensure they’re not undertaking unnecessary risks. Deciding where to store your Ethereum can be tricky because each option entails advantages and disadvantages. If you hold your crypto coins in one wallet, you risk losing all your funds if it’s phished or hacked. If you spread out your investments, only one wallet is vulnerable. All in all, the decision depends on whether you trust yourself to maintain the security of your wallet and the assets within it. If the answer us no, diversify among crypto exchanges.
You must exercise the same degree of caution you would with cash. Given the countless fraud schemes and lack of protection through government regulation, you must take every possible precaution to protect yourself. You’re the weakest link in computer security, so develop a sound sense of judgment.