As we begin the new year, it is important to remember the importance of keeping your cryptocurrency secure. The recent collapse of FTX serves as a reminder that the phrase "Not your keys, not your coins" should be taken seriously. For the cryptocurrency market to thrive, it must maintain the trust of its users and potential investors by being a reliable and functional system.

Whether you are new to the industry or a seasoned player, it is always a good idea to review your current security measures and address any potential vulnerabilities before any issues arise. Cryptocurrency can be a convenient way to store and transfer value, but it is important to be aware of the risks and take steps to protect yourself.

This article provides some tips for staying safe with cryptocurrency, no matter where you are in your investing journey.

KNOW YOUR WALLET TYPE

Your cryptocurrency's security largely depends on the wallet you choose to store it in. There are two main types of wallets: hot wallets, which are connected to the internet, and cold wallets, which are not connected to the internet. It is generally considered more secure to store the majority of your cryptocurrency in a cold wallet.

Examples of Hot wallets include:

• Mobile wallets (Metamask, Trust Wallet)
• Desktop wallets (Electrum, Exodus to name a few)
• Online storage (Any Exchange such as Binance, Coinbase, or requires a browser to operate)

Although hot wallets offer quick and easy access to cryptocurrency, they are not as secure as cold wallets because they are connected to the internet and therefore more vulnerable to cyber-attacks. As a result, it is generally recommended to only keep a small amount of cryptocurrency in hot wallets and to use cold wallets for the bulk of your holdings. Hot wallets can still be useful for making transactions quickly, but it is important to be aware of the added security risks.

Cold wallets act differently and store your assets offline. These include:

• Hardware wallets (Treznor, Ledger)
• Offline Storage (Wallets that are not connected to a network)

Cold wallets offer enhanced security for your cryptocurrency because they are not connected to the internet and therefore less vulnerable to cyber attacks. While they offer an extra layer of protection, it is important to be aware that cold wallets also have their risks, such as the possibility of being lost or stolen. To minimize this risk, keeping multiple copies of your cold wallet in different locations is recommended. Cold wallets are generally considered to be more secure than hot wallets, but it is important to carefully consider the risks and benefits of each type of wallet before making a decision.

It's certainly worth doing your research for both wallet types to see what suits you.

For more information on Cold wallet storage, check out a few providers below:

Treznor Cold Wallets - https://trezor.io/

Ledger Wallets - https://www.ledger.com/

PASSWORDS & 2FA (Two Factor Authentication)

Your wallet and any online accounts associated with your cryptocurrency should have strong, unique passwords that are difficult to guess. Avoid using the same password for multiple accounts, and consider using a password manager to help you generate and store secure passwords.

Changing passwords and details regularly can be an extra step to protect your assets.

What is two-factor authentication (2FA)

Many online platforms and wallets offer 2FA, which adds an extra layer of security by requiring you to enter a code sent to your phone via email, text, or an authentication app. This second layer of security means that your account cannot be accessed unless the user has both your phone and passwords to your account linked.

Sadly, this does not make you untouchable - as hackers can obtain your authentication keys without your phone through a "Sim swap" attack. So just be careful about links, websites and other software downloaded from any unknown and untrusted sources. However this type of attack is fairly rare - so 2FA is pretty safe. 

PHISHING ATTACKS

Scammers may try to trick you into giving them access to your cryptocurrency by sending fake emails or messages claiming to be from a legitimate company or individual. Always verify the identity of the sender before clicking on any links or entering any personal information.

Types of phishing attacks may include, but are not limited to: 

• Email phishing: Hackers may send an email that appears to be from a legitimate company or individual, and ask the recipient to click on a link or download an attachment. If the recipient falls for the trick and clicks the link or downloads the attachment, they may be taken to a fake website or their device may be infected with malware.

• SMS phishing: Hackers may send a text message that appears to be from a legitimate source, and include a link that, when clicked, takes the victim to a fake website or downloads malware onto their device. This type of attack is also known as "smishing."

• Phone call phishing: Hackers may make a phone call and pretend to be from a legitimate company or government agency, and try to trick the victim into revealing sensitive information or transferring money. 

To safeguard yourself, consider getting a cold wallet. Take your funds offline, and don't have data related to your account on any electronic device. I there's no data on the computer, there's nothing for them. Store seed phrases, offline, and in a physical format if you can. 

AVOID USING PUBLIC NETWORKS (WIFI)

Public networks are often unsecured, which makes it easier for hackers to intercept your data. If you need to access your cryptocurrency accounts while using public WiFi, use a virtual private network (VPN) to encrypt your connection. As a user of VPN's myself, I can highly recommend Nord VPN if you are currently in the market.

Nord VPN Website - https://nordvpn.com/

It does have a fee to use, however, it is inexpensive and worth paying the price for that extra security.

Public WiFi can be convenient, but it also poses security risks due to its unsecured nature, allowing hackers to intercept and access your data transmitted over the network. To safeguard sensitive information and accounts, like cryptocurrency accounts, it is advisable to utilize a virtual private network (VPN) while accessing such information on public WiFi. VPNs encrypt your internet connection and secure your data transmission, providing peace of mind and protection against potential cyber threats.

KEEP SOFTWARE UP TO DATE

Ensuring that you are using the most recent versions of any cryptocurrency-related software or apps and keeping your devices, like computers and smartphones, up to date with the latest security patches is crucial. Many updates and changes to software will be prompted automatically, but some browser plugin or phone apps may require manual updating.

While it may seem unlikely, it is possible for an older version of software that has been compromised to remain on your device if it is not updated. This is why it is important to regularly check for and apply updates to your software and devices. Doing so can help protect you from potential vulnerabilities and ensure the security of your cryptocurrency and other sensitive information.

Additionally, staying up to date with the latest security patches can help prevent hackers from taking advantage of known vulnerabilities in older software versions.

COMMON SENSE

One of the most effective ways to protect your assets when dealing with cryptocurrency is to use common sense and exercise caution. If an offer or request seems too good to be true, it is probably a scam.

Be wary of suspicious messages or requests for personal information, and never share your wallet details or login information with anyone you do not trust. If you receive a strange message on a platform like Reddit asking for personal information, take a moment to think about it and consider seeking a second opinion before responding.

It is important to be cautious and verify the source before exchanging any personal information related to your wallets, seed phrases, or login details. Protecting your personal information and being mindful of potential scams can help you safeguard your cryptocurrency and other assets.

CONCLUSION

To keep your cryptocurrency safe and minimise risks, consider implementing the following recommendations. However, it's essential to keep in mind that the cryptocurrency industry is still emerging and largely unregulated, so it's essential to be careful and well-informed before making any choices.

Thanks for reading!

Happy new year! 

Peace.