Crypto transactions are to be handled with utmost caution to avoid losing funds. This article discusses some tricks to help you maximize security for your Crypto transactions.
Cryptocurrency has grown in popularity over the years, but with the digital gold rush comes a need for strong security measures. Protecting your digital assets from hackers, scammers, and theft is critical.
Cryptocurrency and cybersecurity are inextricably interwoven in the digital world. Blockchain technology, a decentralized ledger that records all exchanges, underpins cryptocurrencies like Bitcoin and Ethereum.
While cryptocurrencies have many advantages, like financial inclusion and fast cross-border transactions, they also represent substantial cybersecurity risks.
Blockchain’s decentralized nature makes it resistant to tampering, but digital wallets and exchanges used to acquire, store, and trade cryptocurrencies are vulnerable to cyber-attacks.
Cybercriminals frequently target these sites to steal money, exploit weaknesses, or commit fraud.
As a result, robust cybersecurity measures such as secure wallet management, strong authentication, and encryption techniques are critical for ensuring the integrity and security of cryptocurrency transactions and investments.
The continual growth of cryptocurrencies and cybersecurity technology highlights the digital financial landscape’s never-ending cat-and-mouse dance between innovators and malevolent actors.
Without further ado, let us see some tricks to maximize security for crypto transactions.
Crypto Transaction Tricks That Maximize Security
In using some of the tricks outlined below, the security of your crypto transactions will be maximized.
- Use a hardware wallet, if possible
- Check URLs to avoid fake cryptocurrency applications
- Back up your seed words correctly
- Do not enter your seed words on a website
- Use a good-quality VPN
- Avoid fake websites and apps
- Actively manage your exchange authentication methods
- Whitelisting
- Exchange authentication via 2FA
- Avoid scams and phishing attempts
- Wallet authentication and Cryptokey storage
Use a Hardware Wallet, If Possible
One of the most efficient ways to protect your cryptocurrency is to use a hardware wallet, a USB drive containing your key vault.
It is designed so that your seed words cannot be transferred from the device unencrypted. A hardware wallet has no internet connection, making it extremely difficult for an attacker to infect it with malware.
Each time you use a hardware wallet, you must connect it to your computer or mobile device by USB or Bluetooth.
A signature is generated within the wallet and delivered to an internet-connected device, letting you perform cryptocurrency transactions without exposing your key to a malware-infected device.
Hardware wallets also have PIN codes, making it more difficult for an attacker to obtain your cryptocurrency, even if it is physically stolen.
However, if you lose or steal your hardware wallet, you should immediately transfer your cryptocurrency from the wallet’s address.
The main disadvantages of hardware wallets are inconvenience and cost.
Hardware wallet Crypto transactions are typically slower than software wallet Crypto transactions, and depending on where you store your wallet, you may need to wait sometime to access it.
So, if you only have a small amount of cryptocurrency, you might not want to spend money on a hardware wallet. If you have a significant cryptocurrency portfolio, it may be worthwhile.
Check URLs to Avoid Fake Cryptocurrency Applications
Deceiving someone into installing a bogus wallet or using fraudulent software is a common trick to steal cryptocurrency.
Scammers, for example, may provide counterfeit copies of MetaMask, a popular Ethereum wallet.
They may even advertise these fake wallets on Facebook or Google.
To avoid this fraud, only download a wallet from the developer’s official website and avoid clicking on ads on search engines or social networking platforms.
You may also want to avoid searching for wallets on Google Play or the iOS App Store, as these stores have been known to rank fraudulent wallets toward the top of search results.
Most developers provide direct links to their mobile wallets on their websites; thus, using a mobile app store search engine is unnecessary.
Back up Your Seed Words Correctly
When you download wallet software and begin configuring it, you are usually required to back up your seed words.
Seed words, a secret recovery phrase or master key, produce your account keys using cryptography. If your device crashes, you can recover your accounts by entering the seed words you saved.
Anyone with access to your seed words can access all the linked accounts.
If you’re new to cryptocurrency or in a hurry, you may want to skip this step or save a screenshot as a backup. However, this is not a good idea.
A better method is to scribble down your seed words on a physical piece of paper and put it in a safe place where it cannot be destroyed.
If you’re worried about losing your physical copy, write your words on multiple pieces of paper and store them in numerous discreet locations.
Some people utilize fireproof and waterproof safes to keep their seed words. Keeping them on a tangible media that cannot be deleted is critical.
Do Not Enter Your Seed Words in a Website
If you use a browser extension wallet, it will constantly ask for your cryptocurrency password. If you close and reopen your browser, it will ask for your password.
If you leave for a few minutes, your wallet will close and ask for your password when you return.
However, a browser-extension wallet like Metamask, Coinbase wallet, or Brave wallet will only prompt you for your seed words the first time it is installed.
If you’re browsing the web and come across a window that looks like your wallet and requests your seed words, be wary because it could be a bogus website.
The safest method is to close the tab and clear your browser’s cache. If you suspect your wallet is broken, uninstall and reinstall it from a blank browser page.
This should help ensure you interact with your wallet rather than a web app on a specific website.
Use a Good-Quality VPN
Another way to avoid being targeted by scammers is to utilize a VPN service.
A reliable VPN will encrypt your communications and hide your online activities from potential attackers while concealing any cryptographic processes from your Internet Service Provider (ISP).
Man-in-the-middle (MITM) attacks pose a hazard to all crypto transactions, including crypto transactions. A virtual private network (VPN) can help to prevent such attacks.
An MITM attack occurs when a hacker breaks your connection to a website and inserts their equipment between you and the site.
They then transfer your data to the website you wish to interact with, providing the impression that you are connected as usual. They can now monitor anything you do.
The information a scammer receives may indicate that you utilize cryptocurrencies, causing them to use further methods to gain access to your crypto investments, such as showing you bogus websites or getting you to install a fake wallet.
Using a VPN can provide the necessary security.
Avoid Fake Websites and Apps
When investing in cryptocurrency, make a mental crypto security checklist and apply the same common sense and due diligence as any other digital service.
Unfortunately, many fraudulent apps and websites try impersonating today’s most reliable services.
For example, if you’re downloading a cryptocurrency exchange mobile app, be sure it’s authentic – popularity, reviews, legitimate branding, and other indicators can provide important contextual signals about an app’s trustworthiness.
The same applies to cryptocurrency websites and exchanges on a desktop computer; be sure the websites are trustworthy.
Fake and unregulated cryptocurrency exchanges sometimes confuse potential victims by posing as legitimate exchanges with similar-looking URLs, so make sure the platforms you use are authentic.
Actively Manage Your Exchange Authentication Methods
Before making a user account with a cryptocurrency exchange, you should consider creating a new email address unrelated to your existing one.
Make sure you exclusively use this new email for cryptocurrency transactions.
Many users only have one email account, which might be dangerous if a company you joined using your email address is hacked or your email account password is stolen from another source.
Either of these options could reveal your personal information.
Additionally, you should actively manage your login details. The average internet user has multiple online accounts, many of which can be accessed with the same password.
As a result, it’s no surprise that weak and repetitious passwords account for more than 25% of all data breaches.
Your exchange authentication methods (including passwords) should be unique and not shared between several online platforms.
Password managers, which allow you to securely generate, manage, and save passwords for many accounts, can significantly speed up the process of creating strong, unique passwords.
Whitelisting
Whitelisting is the last line of defense if your account has been compromised.
Whitelisting is an exchange authentication method that allows you to pre-approve specified wallets and cryptocurrency addresses as verified accounts to which you can send funds; however, all outgoing transactions are prohibited.
When you initially whitelist an address, you must securely authenticate into your exchange account with the appropriate login credentials and complete any 2FA authentication settings that are enabled.
In principle, if a hacker gains access to your account, they cannot move your funds to a wallet they control because their address is not whitelisted.
Exchange Authentication via 2FA
Once you’ve set up an exchange account with a dedicated email address and a unique password, enable two-factor authentication for logins and asset transfers.
To access your account, 2FA often asks you to provide a one-time passcode or an SMS code (received via text) with your password.
2FA has become a crypto security standard, providing second-tier robust protection.
With 2FA, you enter your phone number or download an app like Authy or Google Authenticator and then connect to your account using a QR code.
Once linked, a 2FA app generates a random code that expires in 60 seconds.
The security of this method is only threatened if an attacker gains access to both your password and the authenticator program on your device.
Certain 2FA providers even let customers decide which devices can utilize their 2FA. Allowing only one device to access 2FA safeguards consumers against SIM-swap attacks.
As a result, a 2FA app that does not require SMS texts is frequently recommended for exchange authentication.
A physical security key, such as a Yubikey, can be plugged into your computer via USB to enable 2FA.
These crypto security keys provide strong security by giving hardware-backed cryptographic proof of your identity.
They ensure that only the holder of the hardware key has access to an associated account, even if an attacker has compromised your password or successfully performed a SIM-swap attack on your phone.
This decreases the risk of phishing, man-in-the-middle, and replay attacks involving stolen passwords or one-time password (OTP) credentials.
Avoid Scams and Phishing Attempts
You should also make an effort to avoid common phishing scams.
In a phishing scam, a fraudster impersonates a respectable authority figure or organization to trick a victim into disclosing sensitive information or enabling unauthorized access to their funds.
The vocabulary of a phishing attack typically suggests a sense of urgency, and it can be delivered through phony phone calls, text messages, advertisements, or emails – nearly any form of communication.
The most effective way to avoid phishing scams is to be exceedingly cautious about who and what you engage with online.
Before interacting, pause and search for red flags in the legitimacy of each email sender’s contact information, every hyperlinked URL, and any other identifying information, and proceed with care if you are unsure.
Because phishing attacks are primarily the result of human error, implementing solutions such as two-factor authentication or a password manager can lower the risk of these attacks once an account password is obtained.
Wallet Authentication and CryptoKey Storage
Once you have purchased cryptocurrency, you must keep it in a custodial or non-custodial wallet.
With a non-custodial wallet, you have complete control over your private keys, which handle your cryptocurrency and prove that the assets are your own.
While there is no need to rely on a third party while using a non-custodial wallet, it does mean that you are responsible for not losing your keys and must take care to protect your funds.
Another entity handles your private keys and crypto key storage with a custodial wallet. In other words, you rely on a third party to protect and refund your cash if you trade or transfer it elsewhere.
While a custodial wallet lessens personal accountability, it requires trust in your funds’ custodian, often a cryptocurrency exchange.
You will also have to decide between a hot and cool wallet. Hot wallets are typically web-based, mobile, or desktop wallets that connect to the internet. Web wallets are the most insecure.
However, all cryptocurrency hot wallets are vulnerable to cyber-attacks. Hot wallets offer the advantage of being simple to use.
Because they are always online, there is no need to go from offline to online to execute a cryptocurrency transaction. People who own many cryptocurrencies are unlikely to keep them in hot wallets.
Cold storage wallets are generally regarded as secure. Stealing from a cold wallet often requires physical possession of the cold wallet and any related PINs or passwords that must be entered to access the funds.
Most hardware wallets are cold wallets running on devices resembling small to medium-sized USB sticks. There are pros and downsides to both crypto-essential storage methods.
Though a cold wallet is technically secure, offline crypto cold storage might be significantly less “convenient” than a hot wallet, particularly for those who are not as technologically advanced.
If you elect to use a hardware wallet, you must develop a recovery phrase for wallet authentication in case it becomes unreachable.
We would also look into some scams associated with crypto transactions so that you look out for them.
Common Scams Associated With Crypto Transactions
Here are some crypto transaction scams you should avoid.
- Phishing scam
- Upgrade scam
- SIM swapping frauds
Phishing Scam
Phishing scams have long been popular among scammers. Fraudsters want to access your account information, including your cryptocurrency keys.
As any cryptocurrency user knows, the person who owns the key has complete control over the coin.
Phishing scammers frequently trick you into clicking on a link to a fraudulent website, which allows them to steal your account information.
They can imitate well-known corporations such as Amazon, your bank, utility companies, or even government agencies and may post links on social media or contact you directly.
For example, they may email or text you to inform you that a withdrawal has been launched and provide a link to cancel the cryptocurrency transaction.
Anyone is susceptible to a phishing scam, and any digital asset can be attacked, as actor and film producer Seth Green discovered earlier this year when four of his Bored Ape NFTs were taken.
Upgrade Scams
Cryptocurrency systems, like all other software, are subject to constant updates.
Because many people are accustomed to upgrades in the digital era, scammers can easily deceive cryptocurrency users into handing over their private keys as part of an “upgrade.”
Upgrade scammers can take advantage of legal changes, such as the recent Ethereum merger, which prompted the Ethereum Foundation and Robinhood to advise customers to be on “high alert” for upgrade scams.
SIM Swapping Frauds
SIM-swap frauds are among the most recent cryptocurrency scams. They occur when a scammer obtains a copy of your SIM card and gains access to all of your phone’s information.
That information can be used to receive and use the two-step authentication codes required to access crypto wallets and other accounts without the victim knowing.
When this happens, the victim’s crypto accounts can be hacked and wiped out without the victim even being contacted.
Summary
Crypto transaction scams are carried out by crooks who create spoof accounts of their victim’s online crypto address and use them to give the victim a tiny sum of currency in the hope that they will mistakenly send money to the false address later.
While this is one of many ways to lose cryptocurrency in crypto transactions, there are several tricks you can use to guarantee the transaction is sent to its intended destination.
Whether you are an expert or new to the world of digital assets, the tricks outlined above can help you reduce your risks and reap the rewards of the crypto world.