Your Handbook for Everyday Security
This series of articles is based on a handbook used as an outline for cybersecurity courses, viewed from a user perspective. The handbook, or these articles, is copyrighted by Vasco F. Gonçalves, working for SDNC sàrl.
Understanding Crypto Wallets and Protection
Software Wallets vs. Hardware Wallets
- Software Wallets:
- Definition: Software wallets are applications or digital platforms that store cryptocurrency keys on devices like smartphones, computers, or online services.
- Example: Coinbase Wallet, Exodus, or MyEtherWallet are software-based options.
- Accessibility: Convenient for frequent transactions but might be more susceptible to online security threats.
- Hardware Wallets:
- Definition: Hardware wallets are physical devices specifically designed to store cryptocurrency keys offline, offering enhanced security.
- Example: Ledger Nano S, Trezor, or KeepKey are popular hardware wallet choices.
- Security Emphasis: Designed to keep keys isolated from internet-connected devices, providing enhanced protection against online threats.
Setup Steps for Wallets
Software Wallet Setup:
- Download and Installation: Install the wallet application on your device from a trusted source.
- Create a Wallet: Generate a new wallet within the application, following the setup prompts to create keys and backup phrases.
Hardware Wallet Setup*:
- Device Initialization: Unbox and initialize the hardware wallet according to the manufacturer’s instructions.
- Generate Backup Seed: Create a backup seed phrase (recovery phrase) during the setup process. This phrase is critical for recovering the wallet if the device is lost or damaged.
Backup Phrases and Recovery
- Seed Phrase Importance: The backup seed phrase generated during wallet setup is crucial. It serves as the master key to restore access to the wallet if the device is lost, stolen, or damaged.
- Secure Backup: Safeguard the seed phrase offline in multiple secure locations, ensuring it’s not accessible to unauthorized individuals.
Best Practices
Regular Updates and Security: Keep software wallets updated and practice caution while interacting with cryptocurrency-related services or platforms.
Offline Storage: Store backup phrases or recovery seeds securely offline, away from digital threats like hacking or malware.
Exchange Security Measures
Two-Factor Authentication (2FA)
- 2FA Implementation: Enable two-factor authentication on cryptocurrency exchange platforms for an additional layer of security.
- Example: Use authenticator apps like Google Authenticator or hardware keys for 2FA setup on exchanges.
Whitelisting Addresses
- Address Whitelisting: Some exchanges offer the option to whitelist withdrawal addresses.
- Setup Process: Register specific cryptocurrency wallet addresses where funds can be withdrawn. Any other withdrawal attempt to an unlisted address gets rejected.
Avoiding Scams and Phishing
- Scam Awareness: Be cautious of phishing attempts, fraudulent schemes, and fake exchanges impersonating legitimate platforms.
- Vigilance: Double-check website URLs, avoid clicking suspicious links, and verify the authenticity of communication from exchanges.
Self-Custody Options
- Cold Storage and Hardware Wallets: Consider moving cryptocurrency assets from exchanges to self-custody solutions for added security.
- Cold Storage: Transfer funds to hardware wallets or offline storage solutions for enhanced protection against online threats.
Best Practices for Exchange Security
- Regular Security Audits: Periodically review security settings, account activities, and access permissions on exchange platforms.
- Education and Research: Stay informed about the latest security practices, potential scams, and evolving threats within the cryptocurrency space.
Risk Mitigation and Self-Custody
- Risk Diversification: Spread cryptocurrency holdings across different wallets or platforms to mitigate potential risks associated with a single point of failure.
- Security Hygiene: Practice robust security measures, such as strong passwords, device security updates, and cautious engagement with unknown or suspicious entities.
Anti-Malware and Patching
Anti-Malware Protection
- Antivirus and Anti-Malware Software: Install reputable antivirus and anti-malware software on devices used for cryptocurrency transactions.
- Routine Scans: Schedule regular scans to detect and remove potential threats from the system.
Operating System and Application Updates
Never forget to do updates – everyday, even if the system does it automatically, check them if it was done.