The importance of making secure Crypto transactions cannot be overemphasized, as this is paramount to prevent loss of funds. This article discusses the ultimate checklist for safe Crypto transactions.
When starting with Cryptocurrency, you can use a few security guidelines to ensure a safe experience. Most of them follow the same common-sense practices as any other web service.
This includes utilizing unique passwords routinely updated, keeping your login credentials safe and confidential, and accessing your crypto assets through secure networks.
As always, you should be alert of fake apps or websites, phishing attempts, and other scams intended to steal your digital assets, just as you should be wary of schemes targeting traditional bank accounts or other internet accounts.
That being said, you should take a few additional steps to protect your crypto transactions further.
These include enabling two-factor authentication (2FA) for login, adding extra security measures for receiving or spending Cryptocurrency, and even using ultra-secure cold wallet storage for your digital assets and others.
Without further ado, let us discuss the checklist for safe Crypto transactions.
The Ultimate Checklist For Safe Crypto Transactions
Our checklist for ensuring safe Crypto transactions is;
- Use a Crypto wallet
- Check your Crypto accounts periodically
- Beware of suspicious emails
- Avoid using public WiFi
- Use secure internet for Crypto Transactions
- Use a hardware wallet, if possible
- Check URLs to avoid fake crypto applications
- Back up your seed words correctly
- Do not enter your seed words into a website
- Use a good-quality VPN
- Avoid fake websites and apps
- Actively manage your exchange authentication methods
- Exchange authentication via 2FA
- Avoid scams and phishing attempts
- Wallet authentication and Crypto key storage
- Whitelisting
Use a Crypto Wallet
Storing the majority of your Cryptocurrency in a safe wallet should provide some security against theft. A crypto wallet is a software or physical device containing your cryptocurrency accounts’ keys.
Crypto wallets allow you to transfer assets across cryptocurrency kinds and conduct Crypto transactions while protecting your investments.
Several cryptocurrency wallets are available, so do your homework to determine which is ideal for you and your accounts.
Check Your Cryptocurrency Accounts Periodically
Monitoring your crypto accounts frequently allows you to keep track of any suspicious Crypto transactions, as well as bots that check the health of your wallet and warn you of any Crypto transactions.
Keeping up with cryptocurrency news lets you promptly report any losses you may have had in case of a breach. To increase security and protection, change your login credentials frequently.
Be Aware of Suspicious Emails!
Hackers frequently utilize social engineering to perpetrate cryptocurrency schemes. This may include sending phishing emails to access people’s crypto transactions.
When receiving emails, be aware of addresses that appear slightly off, weird spelling and language errors, and any links or attachments in the message.
Avoid fake giveaways on social media, and always double-check any cryptocurrency website or app. They are being cautious and observant while online is a vital step in keeping your account safe.
Avoid Using Public WiFi
Free public WiFi at a restaurant or coffee shop may be a practical solution when you’re away from home and need to connect to the internet.
However, avoiding public WiFi when doing essential activities like cryptocurrency trading is best. One of the risks of using public WiFi is that others nearby may intercept your internet activity.
They can use the information they collect to assess whether you browse cryptocurrency websites. In some cases, they may be able to view your Crypto transactions.
This does not necessarily allow them to steal your Cryptocurrency.
However, if a scammer notices you performing high-value Crypto transactions or merely browsing crypto sites, they may pay more attention to you.
Use Secure Internet for Crypto Transaction
Using secure internet to connect to your cryptocurrency accounts entails more than just avoiding public WiFi networks and questionable websites.
You must set up a basic security architecture if you do most of your cryptocurrency trading at home.
This includes ensuring your internet is secure by testing your firewall for flaws and ensuring your anti-malware software is correctly configured and up to date.
It also entails creating a strong password for your wireless router—most come with default passwords.
Enable network encryption, stop network name broadcasting, and ensure your router software is constantly updated. Learn more about how to set up a secure home network here.
Use a Hardware Wallet, if Possible
One of the most effective ways to protect your Cryptocurrency is to utilize a hardware wallet, a USB device that stores your key vault.
It is constructed so that your seed words cannot be transferred out of the device unencrypted. A hardware wallet lacks an 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 PC or mobile device by USB or Bluetooth.
A signature is generated within the wallet and sent to an internet-connected device, allowing you to complete Crypto transactions without exposing your key to a potentially malware-infected device.
Hardware wallets also contain PIN codes, making it harder for an attacker to get your Cryptocurrency even if it is physically taken.
However, if you lose your hardware wallet or it is stolen, transfer your Cryptocurrency out of the wallet’s address as quickly as possible.
The primary downsides of hardware wallets are inconvenience and cost.
Hardware wallet Crypto transactions are often slower than software wallet Crypto transactions, and depending on where you put your wallet, you may have to wait sometime to retrieve it.
So, if you only have a modest amount of Cryptocurrency, you may not want to spend money on a hardware wallet. If you have a large Crypto holding, it may be worthwhile.
Check URLs to Avoid Fake Cryptocurrency Applications
A popular scam for stealing Cryptocurrency is deceiving someone into installing a phony wallet or utilizing false software. Scammers, for example, may provide fraudulent copies of MetaMask, a popular Ethereum wallet.
They may even promote these fake wallets on Facebook or Google.
To avoid this scam, only download a wallet from the developer’s official website and prevent click-through adverts on search engines or social media sites.
You may also want to avoid searching for wallets on Google Play or the iOS App Store, as these stores have been known to offer bogus wallets toward the top of search results.
Most developers provide direct links to their mobile wallets from their official websites, making using a mobile app store search engine unnecessary.
Back-Up Your Seed Words Correctly
When you download wallet software and begin to set it up, you are typically prompted to back up your seed words.
Seed words, also known as a secret recovery phrase’ or master key,’ are used to generate all your account keys cryptographically. If your device crashes, you can retrieve your accounts using the seed words you saved.
Anyone with access to your seed words can access all accounts associated with those words.
If you’re new to Cryptocurrency or simply in a hurry, you might be tempted to skip this step or take a screenshot to save as a backup. But this is not a good idea.
A better way is to jot down your seed words on a tangible piece of paper and keep it in a secure location where it cannot be destroyed.
If you’re concerned about losing your physical copy, you can write your words on many pieces of paper and keep them in various covert hiding places.
Some folks use fireproof and waterproof safes to store their seed words. Keeping them on a tangible medium that cannot be removed is crucial.
Do Not Enter Your Seed Words into a Website
If you use a browser extension wallet, it will frequently prompt you for your cryptocurrency password. If you close and reopen your browser, it will request your password.
If you move away for a few minutes, your wallet will close and prompt you for your password when you return.
However, a browser-extension wallet like Metamask, Coinbase wallet, or Brave wallet will only ask for your seed words the first time it is installed.
If you are exploring the web and come across a window that looks like your wallet and asks for your seed words, be cautious because it could be a fraudulent website.
The safest option is to exit the tab and remove your browser’s cache. If you believe your wallet is malfunctioning, you can delete and reinstall it from a blank browser page.
That should assist in guaranteeing you’re engaging with your wallet rather than a web app on a specific page.
Use a Good-quality VPN
Another strategy to avoid being targeted by scammers is to use a VPN service.
A solid VPN will encrypt your communications and disguise your online activity from possible attackers while concealing all cryptographic operations from your Internet Service Provider (ISP).
Man-in-the-middle (MITM) attacks threaten any Crypto transaction, including crypto transactions. A virtual private network (VPN) can assist in preventing such attacks.
In an MITM attack, the hacker disrupts your connection to a website you’re visiting and inserts their device between you and the site.
They then send your data to the site you want to engage with, giving the impression that you are connected as usual. They can now monitor anything you do.
The information a scammer receives may indicate that you are a cryptocurrency user, prompting them to employ additional techniques to gain access to your crypto investments, such as showing you false sites or convincing you to install a fake wallet. Using a VPN can offer valuable safety.
Avoid Fake Websites and Apps
When you first start investing in Cryptocurrency, you should create a mental crypto security checklist and use the same common sense and due diligence as any other digital service.
Unfortunately, many phony apps and websites attempt to imitate today’s most trustworthy services.
For example, if you’re downloading a cryptocurrency exchange mobile app, make sure it’s genuine – popularity, reviews, real branding, and other signs can provide vital contextual clues regarding an app’s legitimacy.
The same goes for viewing crypto websites and exchanges on a desktop computer; make sure the websites are trustworthy.
Fake and unregulated cryptocurrency exchanges frequently deceive potential victims by acting as legal exchanges with similar-looking URLs, so ensure that the platforms you use are genuine.
Actively Manage Your Exchange Authentication Methods
Before opening a user account with a cryptocurrency exchange, you should consider generating a new email address unrelated to your existing email addresses.
Make sure you only use this new email for crypto transactions.
Many users only have one email account, which might be risky if a firm you signed up with using your email address is hacked or if your email account password is hijacked from anywhere else.
Either of these options may disclose your private information.
You should also take steps to manage your login information actively. The usual internet user has numerous online accounts, many of which may be accessed with the same password.
As a result, it should come as no surprise that weak and repetitive passwords account for more than a quarter of all data breaches.
Your exchange authentication methods (including passwords) should be unique and not reused across several online platforms.
Creating strong, unique passwords can be considerably accelerated using password managers, which provide an easy way to securely create, manage, and save passwords for many accounts.
Exchange Authentication via 2FA
Once you’ve created an exchange account with a dedicated email address and a unique password, enable two-factor authentication for login and asset transfers.
To access your account, 2FA normally requires you to enter a one-time passcode or an SMS code (sent via text) and your password. 2FA has become a crypto security standard, offering a second-tier solid protection.
With 2FA, you enter your phone number or download an app, such as Authy or Google Authenticator, and then connect to your account via QR code.
Once linked, a 2FA app creates a random code that expires after 60 seconds.
The security of this method can only be jeopardized if an attacker acquires access to both your password and the authenticator program on your device.
Certain 2FA providers even allow users to specify which devices can access their 2FA. Allowing only one device to access 2FA protects consumers from SIM-swap attacks.
For this reason, a 2FA app that does not use SMS messages is frequently recommended for exchange authentication.
A physical security key, such as Yubikey, can be plugged into your computer over USB to provide 2FA.
These crypto security keys offer high safety by providing hardware-backed cryptographic evidence of your identity.
They ensure that only the bearer of the hardware key has access to an associated account, even if an attacker has hacked your password or successfully carried out a SIM-swap assault on your phone.
This reduces the danger of phishing, person-in-the-middle, and replay attacks that use stolen passwords or one-time password (OTP) codes.
Avoid Scams and Phishing Attempts
You should also make every effort to avoid popular phishing scams.
In a phishing scam, a fraudster impersonates a legitimate authority figure or organization to mislead a victim into providing critical information or granting illegal access to their funds.
A phishing attack’s rhetoric frequently implies a sense of urgency and can be delivered by false phone calls, text messages, adverts, or emails – virtually any form of contact.
The best method to avoid phishing scams is to be extremely cautious about who and what you interact with online.
Before engaging, pause and look for red flags in the validity of every email sender’s contact information, every hyperlinked URL, and any other identifying information, and err on caution if you’re doubtful.
Because phishing attacks are solely caused by human mistakes, adopting solutions like two-factor authentication or a password manager can reduce the danger of these assaults if an account password is obtained.
Wallet Authentication and Crypto Key Storage
Once you’ve purchased Cryptocurrency, you must pick whether to store it in a custodial or non-custodial wallet.
With a non-custodial wallet, you have complete control over your private keys, which manage your Crypto and show that the assets are yours.
While there is no need to rely on a third party while utilizing a non-custodial wallet, this implies that you are solely responsible for not losing your keys and must take precautions to preserve your cash.
With a custodial wallet, another company manages your private keys and crypto key storage. In other words, you rely on a third party to protect your funds and return them if you trade or move them somewhere else.
While a custodial wallet reduces personal accountability, it necessitates faith in your cash’s custodian, typically a Crypto exchange.
You’ll also need to choose between a hot and cold wallet. Hot wallets are often web-based, mobile, or desktop wallets connected to the internet. Web wallets are the least secure.
However, all crypto hot wallets are susceptible to online attacks. Hot wallets have the advantage of being easy to use.
Because they are constantly online, there is no need to go from offline to online to complete a Crypto transaction. However, people who retain vast quantities of cryptocurrencies are unlikely to maintain them in hot wallets.
Cold storage wallets are generally considered secure. Stealing from a cold wallet typically necessitates actual possession of the cold wallet and any associated PINs or passwords that must be entered to access the funds.
Most hardware wallets are cold wallets on devices resembling tiny to medium-sized USB sticks. There are advantages and disadvantages to both crypto key storage solutions.
Though a cold wallet is technically safer, offline crypto cold storage can be substantially less “convenient” than a hot wallet, especially for those who are not as tech-savvy.
If you decide to utilize a hardware wallet, you must create a recovery phrase for wallet authentication to regenerate it if it becomes inaccessible.
Whitelisting
Whitelisting is the last line of security if your account is compromised.
Whitelisting is an exchange authentication approach that allows you to pre-approve specific wallets and cryptocurrency addresses as verified accounts to which you can send funds; all outgoing transfers are barred.
When you first whitelist an address, you must securely authenticate into your exchange account using the relevant login credentials and complete any 2FA authentication if those settings are enabled.
In principle, if a hacker gains access to your account, they cannot transfer your funds to a wallet under their control because their address is not whitelisted.
Summary
Retrieving your money back from a fraudulent Crypto transaction is almost impossible.
The best strategy is to take extra care to protect your assets when doing crypto transactions.
Take your time, study the potential frauds, and follow the best practices to ensure safe crypto transactions.
