How to Secure Your Crypto Wallet Against Hacks? - FX Leaders FX Leaders

How to Secure Your Crypto Wallet Against Hacks?

An app, service, or physical wallet like a USB stick that holds public keys and private keys and keeps your cryptocurrency safe and secure is called a cryptocurrency wallet. When conducting cryptographic transactions, you can encrypt and decode using these keys, which are strings of complex letters and numbers.

No central controlling body, such as the federal government, the central bank, or an insurance company, issues or insures cryptocurrency wallets. A public key is comparable to a username for a bank account, and a private key is comparable to a PIN or password. You must protect these secret keys or your entire wallet risk being stolen in a matter of seconds.

In general, the majority of bitcoin wallets provide a variety of security features, including complex passwords and secret phrases. Any wallet cannot be easily compromised. But cryptocurrency users should start adopting additional security measures due to an increase in attempts to hack bitcoin wallets and exchanges.

Your Cryptocurrency can be as Secure as Your Wallet

Users need to realize that their wallet or exchange, not the blockchain, poses the most risk to their cryptocurrency. Your private key is one piece of information that can be monitored and kept on file by the providers. Hackers might potentially gain access to this and take your savings.

As more individuals use cryptocurrencies, there is an increase in competition among the many digital wallets.

It is becoming important for users to choose their wallets carefully because of this. You should only use bitcoin wallets created by reliable firms with a track record. Visit our reliable crypto wallet guide or look at the top seven non-custodial crypto wallets to learn more about this.

But after you’ve done that, you may take a lot of extra steps to ensure the security of your Bitcoin and other cryptocurrencies. 

How Often do Crypto Wallets Get Hacked?

Although cryptocurrency is becoming more and more popular, security risks are also expanding and increasing. Attackers can make more money off of cryptocurrencies as more people invest in it. Since the start of the outbreak in April 2020, there have been roughly a dozen attacks and almost $3 billion worth of cryptocurrency have been taken from exchanges.

Hackers have numerous different methods for obtaining cryptocurrencies, including stealing or guessing your password, breaking into an exchange platform, phishing scams, and more. The most frequent attack, nevertheless, is the theft of a crypto wallet’s private keys.

Common Types of Crypto Scams

Phishing in emails

This occurs when a scammer sends unsolicited emails asking for a user’s crypto account login information. To obtain unauthorized access to a person’s digital investments, the hacker can promise benefits in exchange for a payment.

Investment Fraud

Investment fraud involves a hacker building a bogus copy of a legitimate cryptocurrency trading platform. They might publish false social media ads that appear to be legitimate job opportunities in an effort to persuade consumers that the platform is legitimate. For larger-scale hacking operations, there may be a significant number of con artists charged with contacting people about cryptocurrency investments. The hackers may permit victims to exchange cryptocurrency once they accept deposits in cryptocurrency.

However, because of additional fees, taxes, or waiting periods intended to keep users from understanding they have been cheated, they probably won’t be able to withdraw their investment returns.

Malware

Even though malware is one of the oldest hacking methods, it can still be useful if given the chance to flourish. An individual’s device is infected by hackers with keyloggers, allowing them to monitor the passwords and PINs the user enters on their device. When people inquire “can your crypto wallet be hacked by malware?,” the answer is yes. Cross-scripting is a technique used by hackers to acquire sensitive information from users by diverting them to another Web page.

How to Protect Crypto from Hackers

Use a cold wallet to keep your cryptocurrency

A private key to your money is stored in a cold crypto wallet, which is around the size of a USB drive. You can create your own private key, but if you misplace it, you might not be able to access your investment. Never give anyone else access to your private key, and for best security, keep it physically locked up in a fireproof safe or safety deposit box.

One risk of keeping most of your bitcoin with online service providers is that they frequently have access to your private key; if this information is lost as a result of a breach, you could lose your investment. You could wish to retain many crypto wallets to spread risk even further so that, even if one private key is compromised, the others are still secure. This necessitates the safekeeping of many private keys, which has its own challenges.

Software crypto wallets are another choice in addition to cold wallets and online wallets. However, some malicious apps that are expressly made and installed on your computer or smartphone can potentially corrupt your application wallet.

Use Two-Factor Authentication for Your Exchange

One of the simplest things you can do to help thwart these attacks is to first ensure that you purchase your cryptocurrency safely, and then enable two-factor authentication (2FA) for withdrawals in your exchange app.

Every time you make a cryptocurrency withdrawal, you must enter a code from your phone. It can be inconvenient if your phone’s battery dies or if you have to get your phone from another hallway and you want to withdraw, but it could save you from losing your crypto if an attacker gains access to your account.

If you don’t have 2FA enabled, you must rely solely on the security of your email address and password to safeguard your cryptocurrency. These can be fairly simple for bad actors to get around.

An attacker may be able to trick you into downloading a malware file via email, steal your email password, and use the “reset password” feature to take control of your exchange account. They may also be able to steal your password hash from another website and use hash-cracking software to decrypt it.

With 2FA enabled, the attacker must complete these steps as well as persuade your phone company to transfer your phone service to the attacker’s phone. This enables them to receive your text messages and obtain the code intended for you. It adds an extra layer of effort for the hacker to make the withdrawal, which is often enough to deter them from completing the attack.

Keep Strong Passwords and Change Your Password Frequently

75% of millennials in the US use the same password across various devices, according to a research. What is the most popular password, as unbelievable and ludicrous as it may sound? You guessed correctly, then! It’s 123456. This password came in first place among the top 200 most used passwords worldwide according to independent research conducted by NordVPN.

Imagine someone using this password to access a wallet that contains all of their hard-earned bitcoin. Who is actually at fault?

The most difficult passwords, on the other hand, provide a significant obstacle for hackers. If you can’t recall them, though, you should also put them in writing and save them somewhere secure.

The following tips will help you create a strong password:

  • Combine letters, numbers, and special characters.
  • Use both lowercase and capital letters
  • At least 8 letters minimum
  • Choose the randomly produced password

Avoid Inputting your Seed Words on Websites

If you use a wallet that is a browser extension, it will constantly ask you for your password. Your password will be requested whenever you close and reopen your browser. Your wallet will close if you take a little break and prompt you for your password when you return.

You’ll grow accustomed to having your password requested.

The first time you install a browser extension wallet like Metamask, Coinbase wallet, or Brave wallet, it will request your seed words.

When you’re browsing the internet and an unexpected window that resembles your wallet pops up and requests your seed words, the website is definitely fraudulent. Closing the tab and clearing the cache in your browser is the safest course of action in this situation.

You can remove and reinstall your wallet from a blank browser page if you believe it is truly broken. This should make sure that when you interact with your wallet, it is actually your wallet and not a web app on a specific page.

Conclusion

As more people download wallets and sign up for networks for the first time, the cryptocurrency market will keep reaching new highs, but this surge in activity also attracts more hackers who want to take advantage of the new users.

Cybercriminals have been searching for a technique to gain access to people’s cryptocurrency wallets since the beginning of the cryptocurrency sector and stealing from them. You may improve the security of your wallet by being aware of potential threats to it, such as Phishing, the theft of secret keys, and tampered SMS verification. You can safeguard your cryptocurrency wallet from hackers by using a cold wallet, creating a strong password, and using 2FA verification, among other measures.

Scammers will probably find new ways to steal cryptocurrency in the future, and we’ll update this page when they do. These are some of the best strategies to safeguard your cryptocurrency in the interim.

About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.