Security of cryptocurrency investments. Advices for beginners

There are several methods of secure cryptocurrency storage, starting from local wallets which are located… It’s better to work with the exchange from a separate and reliable device… Protect your e-mail by installing two-factor authentication...

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Security of cryptocurrency investments. Advices for beginners


EXMO

How to protect your newly bought cryptocurrencies?

Nowadays a lot of venture capitalists choose cryptocurrency investments among all types of investments and buy bitcoins as well as other cryptocurrencies as the most promising. Taking into consideration the fact that bitcoin price and the price of some other cryptocurrencies has been rapidly increasing during last year, it definitely makes sense.

However, this procedure is a little bit unusual for beginning investors and has its peculiarities, including the protection of cryptocurrency investments.

How can you provide the security for your cryptocurrency assets?
1) First of all, you should thoughtfully choose the place where to keep your bought bitcoins or other cryptocurrency that you’ve got.
You can keep your cryptocurrency in the local wallets, which are located on the computer of their holder or on the specialized mini-devices (for example, hardware wallets produced by Trezor, KeepKey and Ledger), as well as on the online services. Among such services there are not only highly specialized online wallets, but also cryptocurrency exchanges, which provide services for multi currency storage (also, you can monitor bitcoin rate, buy bitcoin or other cryptocurrency on the same exchanges). Any exchange can store bitcoins, but if we are talking about less popular cryptocurrencies, the number of exchanges which can store them is limited.

The cryptocurrency storage in local wallets (first of all, in the “fat” ones) requires the user to have a certain level of hardware and software knowledge concerning cryptocurrency functioning. Also it needs general consciousness (regardless wallet type), because only user is responsible for his money safety. So, if a user allows his computer being infected with a virus that may “hijack” a wallet-file, nobody will return stolen bitcoins; if a user is not able to perform regular backup of the wallet-file and his computer breaks down, all his cryptocurrency would be lost forever. Finally, if a user forgets his password, then nobody will be able to return the access to his cryptocurrency assets, because he is the only person who has the password.

Cryptocurrency storage in online wallets including cryptocurrency exchanges is more appropriate for the beginners who have invested in cryptocurrency, because it delegates the most part of the technical problems in the competence of these services. However, new problems appear, the first and the main one - choice of the reliable service. This service could be represented only by the platform that has a long-term positive reputation and a rich operational experience in the sphere of cryptocurrency; speaking about the technical side, it also has to provide two-factor authentification of the clients’ accounts and keep their assets in “cold wallets”. Only a certain number of exchanges meets these requirements, and EXMO takes one of the leading places among such exchanges. Where you have the opportunity to store not only bitcoin but also ETH, DASH, LTC, DOGE, ZEC and some other cryptocurrencies. It’s very easy to deposit fiat assets on EXMO, it could be done using the system of digital currency as well as bank transfers. You can easily buy or sell bitcoins on EXMO or convert bitcoins to other currencies. Also you can deposit to the account on EXMO using bitcoin cranes and mining (but do not forget to check previously the minimum limits for the deposit).

2) After this, you have to check the device which you use to manage your cryptocurrency assets is secure. The best option would be to choose a separate “clean” computer, a laptop or a smartphone (which is virus free and reliable) to manage your exchange wallet with the help of it. It would be great if it is not used for any other tasks and for internet-surfing in general. The installation of any doubtful software on such device is not recommended. The same is true for the device, where you’ve chosen to store your local wallet. Antivirus and OS version of this device should be up-to date.

If it’s too difficult, you can manage your assets from the main device, but pay attention to its software “clearness”, use effective anti-virus, that runs in the background mode and regularly check device with special utilities. Or, alternatively, you can reserve a separate reliable virtual system for your assets management (but this option requires certain technical knowledges).

The usage of effective firewall wouldn’t be extra anyway.
The cryptocurrency storage services that are provided by two-factor authentication can strongly reinforce the safety of your crypto assets on condition that you activate this protection in the first place and use it efficiently. In order to support the productive work of 2FA protection, you need to ensure the additional “clean” device like a smartphone, where you have to install special Google application - Google Authenticator (there is 2FA variant, based on simple sending of SMS-code on your phone, but this variant becomes outdated and couldn’t be regarded as very reliable).

3) Apart from technical risks, there are risks connected with “human factor”. In order to protect your cryptocurrency investments from criminal interference, use long and complicated passwords and carefully check exchange address (or other service where you keep your assets) when you login. We do not recommend to visit the exchange using search engines; it’s better to add it to your browser bookmarks. Do not add excessive or doubtful extensions to the browser. Sell bitcoins and buy them only through reliable platforms and do not trust them to cryptocurrency “pyramids” which promise incredible percentage. Do not try to sell bitcoins to some internet exchanges which offer suspiciously profitable rate, but which has been operating during short time period and couldn’t be found on the respected exchange monitoring services.

Use a separate e-mail for communication with an exchange, that has been created only for this purposes. If the address of this e-mail will become known to the third persons - it may become a target for fraudulent letters, with malicious attachments or fake links. That is why, you should keep in secret the e-mail address reserved for communication with the exchange.

Remember, that e-mail protection is also very important: you should install two-factor authentication on it as well. For example, you can set up the login settings using SMS or Google Authenticator code in Google e-mail, as well as on the exchange, using the method of SMS-authentication is not recommended due to its evident obsolescence.

If you still notice suspicious activity (for example, e-mail notifications about account access that you have not performed), immediately contact your exchange support service, so that its representatives could take measures to arrange proper security of your wallet.

We hope, that thanks to our recommendations you can keep your bought bitcoins secure.

Additional materials that may help you:


How to protect account and personal data on EXMO?

Cryptocurrency: Where to start? Pt.4 How to Ensure the Safety of Your Crypto Assets

Monero and Zcash - new level of the anonymity

TOP-5 facts about Ethereum

What are the pros and cons of investing into cryptocurrency

Why do miners choose exchanges to exchange cryptocurrency for fiat funds


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Your respectfully, EXMO team

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