Cryptocurrencies can offer you freedom and independence, but they also need responsibility. In financial centralized systems, like banks or digital money apps, you give up your responsibility over your own money. We can also say that you trust them to not go to bankruptcy with your funds and they remind you of the passwords. On the other hand, you must take real measures for security and privacy in crypto.
There’s usually nobody behind decentralized cryptocurrencies (like Bitcoin or Ethereum). Nobody to really help you out like a support team would do, at least. If you lose your private keys, then they’re gone. If someone steals from you due to your own negligence — of course, it’s illegal, but catching the culprit is quite difficult. Remember that almost everyone is behind a screen now.
Maybe you’re using crypto because you think it’s anonymous. And really, it’s not that private if you’re doing nothing about it. That’s why every crypto user should apply some basic measures to protect their funds (and identity).
Private keys = security and privacy in crypto
This is a cryptographic key that is used with an algorithm to encrypt and decrypt data. The crypto private keys let you access funds in a wallet. At this point, the privésleutels are represented by a row of random words kindly provided by your wallet (the seed, mnemonic, or recovery phrase).
They’re usually between 12 to 24 words with no sense together. However, it’s asked that you put them in order. Those precious words are all yours to handle and care for. They’re de security and privacy in crypto: the only way to access your wallet and your funds. If you lose your device for any reason (damages, accidents, robberies, etc.), the seed phrase is the only way you can take to recover your funds.
And the most important part of this is only you have those words. Nobody else in the world knows them —unless you tell them. So, there’s no caring company behind the app, waiting for you to forget your password. If you forget or lose these words here, then you can say goodbye to your money.
A sad example is the British James Howells, who mined 7,500 BTC in 2009 (around $181 million now). He had the coins and private keys in an old laptop hard drive, which he threw away mistakenly. Now, even after 13 years, he’s still asking the authorities to let him search for it in tons of rubbish. All because he didn’t take good care of his private keys.
Tips
- They’re a few words or numbers. Write them down manually and keep them somewhere safe. If possible, remember them by heart.
- Don’t leave the private keys inside your devices. The devices can be lost, damaged, or even hacked.
- Don’t leave the private keys available on Internet, in general. Every platform can be hacked, or you can leave your session open by accident. That’s why the wisest thing to do is print or copy manually your private keys.
- Try to copy and store your seed phrase in several places. Tell about it to someone you trust —if you want to. You can also store them on a private service (in physical).
- There are several products to make “physical” seed phrases. They engrave the words on metal devices. If you have the possibility, you can buy one of those.
- Think a bit about the future. If you want to inherit your coins to someone after you’re gone, then talk about your private keys, at least, to your lawyer. Nobody else will be able to recover them for your loved ones later.
Exchanging + Custody
Exchange your coins for fiat money (USD, EUR, etc.) is quite common. Clearly, it’s also possible to exchange them for other coins (BTC to USDT, for example); but, in those cases, you’re still handling your private keys (one for BTC and another for USDT). In the first case, when traditional money is involved, you briefly lose that level of control over your funds. Inevitably.
That’s why, to make the process as decentralized as possible, exchanging your coins must be fast. If you open an account in a centralized exchange and choose to leave the coins there, you’re putting them at risk. Not because the exchange is a scam (it could be, though), but because the exchange can be hacked, can be ordered to seize your funds, or can go to bankruptcy. Even a small identity verification issue can freeze your account for days.
And, since you don’t have private keys there (only an account with a password), they can do those things to everyone’s coins inside their platform. Celsius, a crypto lender in bankruptcy now, even alleged that their clients gave up their legal rights over their coins when deposited on the platform. Not your keys? Not your coins. Exchange with security and privacy in crypto!
Tips
- Try to always receive and store your coins in a non-custodial wallet (one with private keys). They’re easily downloaded as an app on any device and OS.
- If you can buy it, get a hardware wallet for further security. The prices usually go from $23 to $2,000, depending on the piece and brand.
- Only send the exact amount you want to exchange for fiat outside your wallets. And do it quickly. You can also use non-custodial exchanges (zoals Alfacash).
- A higher offer for your coins doesn’t imply higher security. An unknown individual can offer you better rates than any exchange, probably. They can steal your coins faster as well. Sometimes, it’s better to have an intermediary, even for a low fee.
Basics against scams, hacks, and attacks
Someone will try to steal your coins, with or without violence. That’s a fact in USD and BTC equally. The scams will promise you the world: invest only $200 and earn 50% monthly, your wallet had a security issue and we need the private key, send me $1,000 and get back $2,000, bring more members and get a reward; etc. Scammers will try to deceive you in these and other ways constantly.
For their part, the hacks use to take advantage of the users’ negligence. Outdated antivirus, downloads of suspicious files, unchecked links, etc. In the case of platforms and companies, untreated exploits and lax online security. But the physical attacks are also possible, and avoidable. Only if you put the security and privacy in crypto first.
Tips
- The OS, antivirus, and firmware of all your smart devices should always be updated.
- Open geen links of bijgevoegde bestanden van dubieuze e-mails.
- Download files and software only from the official websites.
- Make backups of all your important information and files on external devices, preferably offline —never leave your private key online.
- Don’t believe in the first sights. Look for evidence. A platform or service can be promoted by the Pope and regulated by all the central banks, but is it, though?
- If someone needs to assure you that they’re trustworthy and their product/service is 100% real-no-fake, then it is fake.
- Never talk publicly (including on social media) about your crypto holdings. Someone undesirable can find it out and plan a physical attack.
- Split your funds. Don’t keep them all in the same wallet but distribute them in several of them. Prepare one or several decoy wallets and use multi-signature functions (to not be able to open everything alone) where you can.
Privacy and security for crypto transactions
Did you think Bitcoin is anonymous? Well, it’s totally not. If privacy is what you want, then other coins are better options. For instance, Monero (XMR) is an open-source and mineable coin, just like Bitcoin. Anyone can open a wallet and send and receive transactions. However, its blockchain is obfuscated. This means that niemand buiten de betrokken personen kan de bron, het bedrag of de bestemming vertellen.
To date, Monero is still considered the more private cryptocurrency. The U.S. Internal Service Revenue (IRS) even offered a bounty of $625,000 to anyone who can crack this coin. It’s not the only one, though. Coins like Zcash (ZEC), Grin (GRIN), Verge (XVG), Bytecoin (BCN), and many more, also offer high levels of privacy.
Beyond the coins used, we can also take some additional measures to keep our privacy and security for everything, not just for crypto.
Tips
- Use a Virtual Private Network (VPN). Try to invest in one of high quality, since it’s about protecting sensitive data and transactions.
- Use privacy-focused browsers, like Brave. The latter can also help with undesirable (and potentially malware-related) ads online. Tor is another choice, and it also includes some anonymous messaging systems.
- Use privacy-focused wallets if you’re going to handle public blockchains, like Bitcoin. Samourai and Wasabi are two alternatives.
- Never use the same crypto address to receive funds twice, and don’t publish it. Generate new addresses for every transaction.
- Don’t use public Wi-Fi connections. They can be intercepted, including passwords and/or keys.
- Don’t share a lot about yourself or your holdings on social media.
Do your own research!
This one is a so-common privacy and security measure in crypto that we have an acronym for it: DYOR. Always DYOR! Wanna invest in a new and amazing platform? DYOR. Did you hear a rumor about an exchange having issues? DYOR. Do you want to use a service? Check for previous reviews and DYOR. Do you want to know the last news in crypto to make better choices? Follow everyone that matters on Twitter and DYOR.
Tips
- Never believe just in promises. The first step is to type the name (of the platform, coin, service, company, etc.) on Google and social media.
- Check out their website in detail. Missing links, lack of terms and conditions, generic design, bad grammar, private wallets, and anonymous teams are clear red flags in any project.
- Bad documentation is another fishy sign. A good project has a good whitepaper and clear goals.
- Look for previous reviews by average users on several sites. The ads and sponsored articles are never reliable. If a project is being overpromoted, that could also be a bad sign.
- Seriously, follow the official Twitter accounts of your wallet, exchange, trading service, mining company, prominent crypto journalists, etc. Make a stock of reliable sources with information to trust. Avoid the fake news and avoid FUD.
- Always remember: if it looks too good to be true, probably it’s not true. Do your own research!
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