8 Security Tips For Crypto Risk Management

By diaperfinancingfund | CryptoSensei | 26 Jun 2022


The crypto world is rife with scams and rug pulls, so it is paramount that we protect ourselves. You should know the mantra “not your keys, not your coins” by heart. But other than this, are there any other ways you should adopt so as to safeguard your assets? Don’t worry, I got your back. I compiled the following pro tips for your necessary action.

 

  1. It’s human nature to want to discuss crypto with your online friends, especially if you never talk about it with anyone in real life. But don’t reveal the size of your crypto portfolio in a public forum because you never know if there are any bad people lurking and plotting to scam you. If you really must reveal some data to clarify the context, try expressing percentages in relation to your portfolio instead. For example, I have 60% Bitcoin, 30% Ethereum and 10% USDC.
  2. Have a “burner” wallet for test transactions. Sometimes, you may inadvertently connect your wallet to a fake website, which will deplete your portfolio instantly, leaving it as desolate as a bald man’s head. Hence, it’s vital to have a second wallet so that if you fall prey to a scam, at least your loss won’t be lethal.
  3. It goes without saying that you ought to bookmark the official crypto-related websites that you frequent so that you don’t succumb to phishing scams.
  4. Make it a point to whitelist your addresses on all your crypto exchanges so that when push comes to shove, you can get your funds out in time. Linking your wallet typically takes one week for these exchanges, so the best time to start is now. In view of all these drastic developments, I’m quite thankful that my country, Singapore, made it mandatory for us to whitelist our addresses so as to comply with Travel Rule regulations.
  5. Never store your seed phrases digitally. You never know if your device will be ambushed with malware, thus enabling hackers to wipe out the funds in your wallet immediately.
  6. Some people write all 24 seed phrases on a piece of paper and then lock it inside a safe. A more rigorous way is to divide your phrases into three groups - A, B and C - and write them on a set of three recovery sheets. Specifically, you write the words in Groups A and B on  Sheet 1, the words in Groups A and C on Sheet 2 and the words in B and C on Sheet C. That way, you just need access to any two sheets to recover access to your wallet.
  7. If you have a significant portfolio and wish to avoid the hassle of remembering the location of your recovery sheets, you may wish to fork out money for a Coinplate Alpha (https://getcoinplate.com/product/coinplate-alpha/?utm_source=reddit.com&utm_medium=post&utm_campaign=g1). It comes with 2 stainless steel plates and an automatic marking punch tool. If you are a hands-on person, you may relish the satisfaction derived from marking your seed phrases. Waterproof, fireproof and rust-resistant, it can be placed in a safe or even a bank vault - and be ready for use when you need it.
  8. For investors with more modest means, you will most likely get a Ledger wallet. Setting up a Ledger is more daunting than it sounds and just requires 30 minutes of your time. However, when your wallet is lost, stolen or defected at the wrong time, these 30 minutes may be precious bandwidth that you cannot afford. So it may be wise to buy a backup Ledger so that you can import your seed phrases into it and stay prepared.

 

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diaperfinancingfund
diaperfinancingfund

budding investor


CryptoSensei
CryptoSensei

chronicles of an English teacher

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