Self-custody of funds is the safest way to keep your money, as long as you know how to do it. Who better than you to take care of your money?
I will present you a brief basic guide to take care of your cryptocurrencies.
If you have your Cryptocurrencies in an exchange, you are not the owner, you are a creditor of the exchange . When you buy Cryptocurrencies on an exchange, you don’t own the keys. What they do is credit a registry, where in your account as a client you register Cryptocurrencies, but they have the keys, you don’t. They have the cryptocurrency stored in their name on the Cardano blockchain, you don’t. The exchange records a debt with you for that amount, and you do not have the coins, but you are a creditor of the exchange and that makes it effective when you withdraw.
The biggest risk of leaving your money in an exchange is the possibility that a hacker manages to change the password of your account in one or more exchanges and steal all your money. This is easier than you think, hacking your cell phone or your pc. A 2FA (second factor of authentication) It minimizes risks, but it should not be SMS, but of the Google Authenticator or Yubikey type.
There is also the risk of hacking the exchange itself, stealing funds that can leave it bankrupt (more likely in exchanges with low volume of customers).
Another problem can be the intervention of a government on the company that owns the exchange and complicates operations, or confiscating your funds for legal reasons, freezing your account for different reasons, or temporarily closing for maintenance just when you need your funds.
There is no absolute protection, but by maintaining these basic good practices you can raise your cybersecurity coefficient.
- Do not access websites from email or open attachments in emails from unknown senders
- Update your system software periodically
- Your passwords must have at least 10 alphanumeric characters, with a sign and a capital letter
- Your operating system must have a startup password
- Use an antivirus and periodically perform a full system scan
- Use VPN for your privacy
- Close sessions at the end of use
- Avoid operations on open and public networks
- Activate your system’s firewall
- Download the software to install and update your applications from the official sites
- Disconnect the Internet when you don’t use it
- Make backup copies of your files
- Install your crypto wallet on your own and non-shared devices
- When you are creating a new crypto wallet make sure that no intruder sees your screen, they would see the seed (words)
- Before installing your crypto wallet, run your antivirus at the maximum depth of analysis
- Keep the seed or secret phrase on paper, in (at least) 2 different places, distant from each other and of your trust (the same physical place can suffer fire or flood) . Paper degrades, but you can laminate it and store it in a fireproof container, or write on an aluminum plate with an awl. For more advanced, a system that requires learning is to encrypt your phrase in PGP, a protocol that has SHA256 security, which Cardano uses for its encryption. Here you can learn
- Do not talk about the amount of cryptocurrencies you have
- Store most of your cryptocurrencies for savings in a cold wallet or offline, non-custodial wallet , in which you have the private keys (restoration words). Not on exchanges. The safest option is a hardware wallet, Trezor or Ledger, but if you cannot access it due to its cost, I recommend that you install your wallet on a device (mobile or pc) that you do not use daily, and keep it disconnected for as long as possible and only You connect to do operations (send and receive ADA). Before installing the wallet, factory reset or format the disk, and then install an antivirus, to give greater security to your wallet
- Buy your devices in official stores , including hardware wallets, never from strangers, or in various virtual stores.
- If you have your device repaired, uninstall your wallet, but if you do not have access, do not give your password to enter the operating system
- When you send cryptocurrencies from your wallet, check at least the first and last 8 characters of the destination address, there are malware that divert funds
- If you have a lot of cryptocurrency funds (the amount is subjective), manage them in different wallets . If you make frequent movements of funds (payments and collections), leave a wallet for it, do not mix your savings with your daily payments (you do not take your home safe to the supermarket, you only carry your small wallet)
- Surely it is a scam if they offer you guaranteed earnings after a while in exchange for delivering your cryptocurrencies
