How To Keep Your Cryptocurrency Safe

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Cryptocurrencies are a big deal. They are the future of money and financial transactions, and they are very difficult to secure. Since most of us don’t know how to secure our cryptocurrency, we should at least know what it is.

In this blog I will explain how to keep your cryptocurrency safe and secure. In short, you should do the following:

1. Get hardware wallets- These are small devices that you can keep on your keychain or put in your pocket, which will store your cryptocurrencies safely away from hackers, malware and viruses. They also have an added benefit of being able to create multiple accounts, so if a database gets hacked, only one account will get compromised instead of all of them.

2. Backup- If you use a computer to store your cryptocurrencies then make sure you have a backup of those too! You never know what might happen with your computer or it may just randomly stop working one day (have you ever done anything like that?) and if that happens, you may need that backup to be able to recover your cryptocurrencies in one go!

3. Don’t use exchanges for your cryptocurrencies- Exchange services are easy targets for hackers because there is usually not much security around them. Exchanges keep large amounts of money on their servers

In general, there are two kinds of people who want to keep their cryptocurrency safe: people who are not very good at keeping their cryptocurrency safe, and people who think it will be worth more in a few weeks.

The first group should be advised that the technology is still very young, so things can and will change rapidly. They should understand the limitations of the technology and make sure that whatever they do is not going to hurt their privacy, or the security of their wallet, either intentionally or unintentionally.

The second group should understand that these maturity issues are all at least somewhat related to how secure the network is on a technical level. If your phone crashes (which I have experienced many times), then you lose all your coins; if the network gets hacked (which happened several times this year), then anyone who has gotten access to your passphrase can take your money.

So far as I am aware, no one has ever been prosecuted for hacking cryptocurrencies. This is probably because there is no law against doing so. But if you are going to keep a cryptocurrency safe, you should be aware of the risks.

People often ask me how to do that. Here are my suggestions:

1) Keep your cryptocurrency offline. Putting it in the cloud exposes it to hackers who can steal it by inserting malware into your computer that then extracts the keys and steals the currency.

2) Don’t keep more than you can afford to lose. If someone hacks your computer, cryptocurrency keys are usually not on it; they could be anywhere else on your hard drive, or on your phone, or on a USB stick someone stole from you. You only need access to them when you want to move them somewhere else, so keeping them secure is easy enough even if they are stolen by someone else: put them in a secure place with a good password and don’t tell anyone where they are.

Any bank that does a transaction with you can use your information to steal your money.

The Internet is full of people who claim to be able to make money buying, selling and trading cryptocurrencies. They are all scammers: they will never get your cryptocurrency without you first losing it.

Some people think they can protect themselves by using an app on their phone to generate a key based on the Bitcoin addresses they want to use. Unfortunately, these keys are completely unbreakable. The only thing you can do to secure them is not keep them in an app on your phone.

To secure your cryptocurrency, you need two things: storage which is unforgeable (e.g. a hardware wallet) and a way of spending it without revealing your identity (I mean, if you have $100 and use a credit card, the bank can still know who you are.)

Bitcoin is a lot safer than bitcoin. But some people like to play it safe. And Bitcoin is a great way to do that.

Cryptocurrencies are not really easy to counterfeit, but that doesn’t mean you have to put them in a safe deposit box. The safest way to keep them is in your head, so you don’t need paper or plastic either.

You can write the recipe for the cryptocurrency on paper or on a piece of metal, and then transfer it from one system to another. You can do this digitally as well as physically, but why bother with paper or metal? Suppose you want to send $10 worth of bitcoin from your computer to someone else’s; how much privacy do you lose by having both of you write down what’s going to happen? If both of you write down the address, it’s trivial for an attacker who has access to both computers to see what is going on. If both of you write down the private key, they can sign transactions and collect money. So writing down the private key is just as bad as writing down the recipe for making cheese curds at home.

So use cold storage instead: keep your private keys on a piece of paper somewhere that only you know about, and if you find someone else

Cryptocurrency is a technology that can make it impossible to trace where your money is coming from. And it can make it impossible to trace what you’re spending it on.

But while cryptocurrency is a lot of fun, there are some risks too:

The most important one is that the cryptocurrency system may become unusable. This is not unlikely, if the system remains a closed system where new currency can only be issued by the issuing computer and can’t be used anywhere else in the world. The easiest way for this to happen isn’t technical innovation – it’s just about politics and economics. The best way to prevent this kind of risk is not to try to make an open system but instead to develop alternatives that will work in an open system. A good example of this type of project is Bitcoin 2.0; another well-known project is OpenBazaar, which allows anyone with Internet access to create their own online store, using any currency they want.

My first wallet had a case that was screwed shut. I didn’t realize at the time that a new wallet should be carried in an open-topped bag. It would have been logical to assume that I was safe because nothing bad could happen to me with my money in a case, but I would like to think I am more rational than that.

In retrospect it seems obvious that if there was a thief who came into my office and knew what he was after, there would be no chance of him finding out about the wallet. But it’s not obvious to everyone.

The most important thing to do is keep the wallet somewhere where you can find it easily; ideally on your desk, or by your bed. Put it in a locked drawer, or better yet, hide it under something you can lock so someone looking for the key won’t find it. Also, don’t use a public computer if you can avoid it: public computers are much less secure than private ones. (I’d also recommend using different passwords for different websites, but of course that is not always possible.)

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