Basic Cryptocurrency Security!
With the rise of any new form of investing we inevitably see the rise of new scams. This is nowhere more evident than in the current crypto space. Daily you hear stories of holder’s wallets being drained and investors losing all of their savings. Fortunately, this can all be mitigated with a few important security practices. This article will discuss a few “Crypto Best Practices” that will help keep your funds safe and secure.
Seed Phrase/ Private Keys/ “12 words”
The very first rule of crypto wallet security is NEVER share your Seed Phrase. Seed phrases are known by a number of different names, some people call them “private keys” others refer to them as “12 words”. These 12 words are randomly generated by whatever wallet software you are using (i.e. TrustWallet, MetaMask, SafePal etc) and they are the literal keys to your wallet and their position on the BlockChain. If scammers get ahold of your Seed Phrase, they will create a new wallet utilizing them and transfer all of your assets out before you can stop it. Scammers often say they are a “Help” or “Support” desk for a specific token and state they need your Seed Phrase in order to airdrop you new tokens or add to your wallet.
When you create a new wallet and it gives you your Seed Phrase you should physically write those words down, in order on a piece of paper and store it in a safe spot. DO NOT SCREEN SHOT THESE ON YOUR PHONE. If hackers are able to access your pictures either from your phone or your cloud service, then your wallet is vulnerable. If you have access to a bank safe deposit box this would be a good, safe, option for storing your seed phrase. If not, you should store them in something that is fire and flood proof and preferably not moveable. (A suitcase style safe could be stolen in a robbery for forced opening at a different location). With that said, it might be a good idea to have two or three copies of your Seed Phrase stored in separate, safe, secure locations.
Most legitimate wallets have a way to turn on password or biometric protections for all transactions. Make sure these are turned on as it is an extra step of protection to help you keep your wallet secure.
Don’t Trust Beggars
In any crypto project the community finds a core group of developers and senior moderators that they have come to trust implicitly. Scammers have learned to target these feelings and will spoof a legitimate Moderator or Developer profile in order to gain someone’s trust. The scammers will have taken the moderators or developers current picture and name and created a whole new profile. The scammers will ask you to send them money or tokens often saying it is a means to help support the overall project and move it forward. While sending them tokens will not likely mean the loss of your whole wallet, you will lose everything you send them with no chance of getting it back.
Dusting Attacks
Dusting attacks are unfortunately a new scheme that has grown more popular with the rise of the proverbial “shit coin.” Dusting attacks start with airdropping of a random token into your wallet. Sometimes these air drops will trigger a notification through your wallet, sometimes it doesn’t. Some projects will airdrop tokens in order to artificially inflate their holder numbers and metrics, this potentially allows them to get on exchanges earlier than they would otherwise be able to. Other times air drops are dusting attacks which are utilized to scam you. If you sell an airdropped token that is part of a dusting attack the scammers can potentially trace that token back to you and identify some of your real-world accounts. This would allow them to target you with phishing schemes potentially accessing your wallet.
The safest practice is if you receive airdropped tokens in your wallet, you should just ignore them, DO NOT SELL THEM. Remove them from your list of tokens and forget that they are there. This will ensure that your wallet and you are protected against scams and phishing attempts.
Don’t Overshare
It seems to have become fairly common in some social media groups for investors/holders to share their wallet sizes. Whether this is meant to be a “humble brag” or to just show that you are in fact an investor it is inherently dangerous to both you and your investment. Most people would never share pictures of their bank account balances or share how much is in those accounts yet have no qualms showing images of their crypto currency wallets. It is best practice to treat your crypto wallet as if it were your bank account. Talking about how much is invested in it potentially makes you a target for scammers and phishing attempts.
Utilize Multiple Wallets
If you are investing large sums of money into cryptocurrencies, it is best practice to utilize multiple wallets. Each wallet would come with its own Seed Phrase that should be stored in the manner mentioned above. Multiple wallets will at least safeguard some of your investments in the event that one of your wallets gets compromised and drained. Most current crypto wallet apps allow you to have and use multiple wallets.
Don’t Click Links
Scammers lately have been utilizing similar but different links to what many popular exchanges are using (i.e. PancakeSwap) A scammer might attempt to circulate a fake link that would require you to connect your wallet thinking you were utilizing PancakeSwap but in actuality you are just giving them access to your full wallet. Scammers are becoming increasingly creative, so we urge you not to connect your wallet to anything that you are not 100% sure of.
*Please note that the author is not a financial advisor and makes no claims to be one, this article is not intended to be financial advice. The numbers and rates of return mentioned in this article are valid as of the time of writing and they do not guarantee future performance.
