How to stay secure when trading and investing in cryptocurrencies – Part 2

In my last article, I covered the very basics in security to consider before investing in cryptocurrencies. It may feel like a chore, but it is absolutely vital. Unless you take your security seriously, you’re wide open to hacks and malware attacks. This article covers steps to ensure you are ‘layered’ up and create the next level of difficulty to lessen the chances of being hacked online.

Storage

Where possible avoid leaving crypto coins on exchanges. Whilst the majority of the most popular blockchains themselves are relatively secure, most exchanges are black holes! They usually have one master wallet full of references to who owns which coins.

Recently, many exchanges have been shut down in Japan following audits by the authorities. Officials concluded that their KYC processes as well as general security were either lacking or not secure enough.

Leaving coins on exchanges poses two main threats. If the exchange gets hacked you could lose your coins. Secondly, if the exchange were ever shut down you could lose access to your coins. It is therefore much safer to move your coins to wallets.

Regardless of what happens to exchanges, using hot and cold wallets (for beginners – keys that have ever been online are “hot”, offline only are “cold”), and external devices such as a Trezor (a brand of secure, USB plug-in hardware wallets) or Ledger Nano S (similar) will ensure that your coins are as secure outside of an exchange as they can be.

Always save your private keys when your machine has no internet connection and save them on an encrypted USB key to a password protected Excel file or a folder which also requires a password to unlock the files. I use a USB key that requires a pin to unlock it before you can even access it.

DNS settings

I promise this will be the only technical part of this article that you’ll have to pay attention to. DNS stands for Domain Name System. It’s basically a record of all websites that have an ip address associated to the address. So when you type www.google.com, the DNS settings use that info to lookup the ip address behind that Google address, which could be something like this: http://74.125.224.72/.

For most people it would be difficult to remember every phone number they have on their phone. To make life easier, we save each number with a name associated to it. DNS does the same thing with websites. This opens up the potential for someone to bypass your security measures by tweaking the name of the site you think you are visiting or sending you to a fake page that looks like the site you are intending to visit. The most common attacks of this sort are called ‘man in the middle’, ‘cache poisoning’ or ‘corrupted zone updates’.

To protect yourself from these type of attacks, you should update the DNS settings on any device you use that connects to the internet. That includes not just your smartphones, tablets and computers, but also any routers you use. I use OpenDNS, and they have very easy, clear instructions on how to update your DNS settings.

By doing this, when you log onto a website, OpenDNS will scan the DNS addresses and ensure that the correct and legitimate website will appear in your browser. If there is a website that is known to be compromised, it will get blocked before you can access it. It is free to use for anyone that is using it on their home network.

Wifi networks

Wifi is one of the most important and revolutionary inventions of the last 15 years. However, never use public wifi networks when trading cryptos. These include wifi networks in cafe’s, hotels, airports, libraries, etc. The security on them is generally poor and the networks often will be using cheap equipment without hardware security. All hackers need is the default username and password and they can soon be sweeping the network to identify users. Use the 4G from your phone to connect via a USB cable to your laptop when you need to access cryptos in public.

Similarly, do not leave the default settings on your home wifi network. Change your network name (SSID) to something that isn’t related to you. Anything will do – Apple, Orange, Blue Moon, you get the idea. Your wifi password should also be changed from the default password to something that is long and hard to figure but easy to remember, here is an example but do not use it: ThErEi$N0$p00n.

Printer

When connecting to your printer, please connect via a USB cable rather than using the wifi. Printers are a very easy hack and the security on the ones used at home is very basic. By turning off the wifi setting on your printer and using a USB cable you cut out any ‘over the air’ attack. I would also not recycle any used cartridges or toners from your printer. Destroy them – ideally by burning them – as the information from toners especially can be replicated.

Printer hard drives are not usually removed before they are resold or recycled. If that printer falls in the wrong hands, it can be spell disaster for your security. There are various ways of deleting data from your printer’s storage system. Some of them include:

  • Unplug the printer for some time. This method will delete any data if your printer does not have a local storage. You need to read the user guide for how long you should be leaving the device unplugged till the data is erased automatically.
  • Clear direct email function. If the printer comes with email feature, delete your password.
  • Wipe clean your disk drive. If the printer comes with a disk drive feature, wipe/format the disk.
  • Destroy hard drive completely. If you are planning to trash your printer, dissemble the parts and then locate the hard drive. Take it out and crush it into pieces with a hammer.

Personal security

Keep who you tell you invest into cryptocurrencies to a small group of people you trust. Refrain from talking about them proudly on a public train, bus or down the pub, you never know who is listening and could follow you. Don’t make yourself a target.

If you are a long term HODLer (bitcoin slang, a person who holds or HODLs their cryptocurrency), I suggest you print out your private keys, save them to an encrypted USB key (or two) and store them somewhere very secure (not at home). Many solicitors and private security firms these days can help with safe storing of private keys, explore these options.

Show your partner or a family member how to extract your cryptos in case something happens to you. We’ve all read stories of people being held up at home for crypto coins, etc. Make sure your security is tight at home with CCTV, alarm systems and alert neighbours, etc. Don’t leave your laptops exposed when you are not in the house, hide them away securely and safely.

You might consider what I’ve written extreme, however, just because you’re paranoid doesn’t mean they’re not out to get you. I can assure you if you carry out all of the steps listed across the two articles, you will be a lot harder to target and the risk of have your cryptos stolen will be significantly reduced, although not eliminated. No one is motivated to look after your money as much as you are. Take action and make sure you’re protected to the best of your abilities. Prevention of theft is always better than dealing with the aftermath.

Leave a Reply

Your email address will not be published. Required fields are marked *