June 29, 2021
Cryptocurrency is a revolutionary kind of money that gives you complete control of your funds. At the time of writing, the crypto market is worth more than $1.3 trillion, and adoption is rising fast.
One of the reasons that cryptocurrency is so attractive to people is that you are the owner of your money and no middle man can tell you what to do with it or where to hold it. Each transfer is recorded on the blockchain and viewable by all members of the network, making it virtually impossible to manipulate them.
However, that doesn’t mean that there aren’t ways to lose your crypto.
If you forget your wallet password, it’s impossible to gain access again. If you make a transfer to the wrong address, your crypto is gone. If a hacker gets a hold of your password, or tricks you into sending it to the wrong place – say goodbye to your crypto.
So how can you protect yourself?
Part 1: Online dangers
Keep an eye on your Wi-Fi
We recommend that you only use protected Wi-Fi for personal use, and that you protect your Wi-Fi with a long, complex passcode.
Many attacks are thwarted just by keeping your anti-virus software updated. A good firewall will block most suspicious items.
Common sense data protection
As with traditional finance, most hackers get your data the old-fashioned way – by tricking you. Never give your details out to a cold-caller, no matter where they claim to be from.
Broadly speaking, there are two types of cryptocurrency wallet – online (hot) and offline (cold). A cold wallet, which looks like a regular USB device, is completely secure as long as it isn’t connected to the internet.
Many hacks occur because a user’s password is too weak. As with all online accounts, it’s recommended that your passwords comprise long strings of different kinds of symbols. Even more secure is two-factor identification – a hacker needs to crack two passwords to get in.
Web wallets are vulnerable to phishing attacks. By bookmarking your key sites, you won’t be tricked into going to a false address.
Part 2: Protecting your seed
When you open a cryptocurrency wallet, you’ll be provided with a seed phrase. This is a string of random words (usually 12-24) that act as a way to gain access if you lose your wallet key. But how can we keep it safe?
Lock it in a box
You can write down your seed phrase, or save it on a USB drive, and lock it in a home safe or bank safety deposit box. The latter is more secure because you need to provide proof of ID to gain access.
The book method
This is a classic way of hiding a code. Simply select a book from your home, find all your seed words, and make a note of where they appear. The advantage of this is that you can buy another copy of the book if it gets lost! Just make sure not to lose your answer key.
Mnemonics and manual encryption
Mnemonic tools are a well-proven way to remember complex things. For example, your string of words could be formulated into a song that’s easier to remember than a long list of words. You could also write your seed down represented as a pictographic code that only you can read. Just don’t forget what the pictures mean!
Part 3: If in doubt – undo!
Kirobo provides a mechanism allowing you to cancel cryptocurrency transfers and retrieve your money if something isn’t right. This extra layer of protection prevents needless loss of funds due to human error, allowing you to make cryptocurrency transactions with confidence.