How to Secure Cryptocurrency Reserves?
Cryptocurrency investors have to use a custodial or non-custodial wallet as a way to store and manage their reserves. It is important to note that custodial wallets allow the trading services provider to manage and secure private keys and reserves on behalf of the account holders.
On the other hand, investors have to take care of private keys and crypto reserves on their own when using a non-custodial wallet. When it comes to trading, investors cannot trade, transfer, exchange, or hold cryptocurrencies without a wallet.
Top Ways to Secure Cryptocurrency Holdings
Here are the most important 5 ways that help investors to secure their reserves:
A seed phrase is a series of words that is issued to secure or back up a wallet account. The wallet user has to remember the correct spelling and order of all 12 or 24 words to use in the event of needing backup, resetting password, or migrating to a new device. Some useful ways to secure seed phrases are mentioned as under:
Once a user receives their seed phrase, it is best to store it offline. In this manner, the user will be able to keep the sequenced phrase away from the reach of scammers or hackers. At the same time, the investors should avoid storing their seed phrase on online places such as cloud, email, desktop, or on actively used mobile phones.
The best place to store a seed phrase is by inscribing it on a metal, paper, or solid surface and keeping it hidden in a secure location.
Split and Secure
A good technique to ensure that the seed phrase is secure is to split it into two or more pieces before storage. In this manner, if a scammer manages to access one part of the secure seed phrase, they would not be able to get the entire code from one location and would be unable to break into an account in an unauthorized manner.
Social Media Spoofing
Social media spoofing is a technique that scammers use as a way to make fake accounts appear as celebrities or firms. There are some scammers who try to access log-in credentials of target victims using social media spoof accounts. Here are some methods to prevent it:
Most social media sites have a verification sign on the profiles of verified account holders. This ensures that investors can distinguish approved investors from the ones that are not verified. In this manner, investors can make sure if an account offering them services is authentic or not.
It is possible to have the same profile title but a user is able to make one user handle for one account. This handle is immutable once created. Therefore, it is best for investors to always identify a social media account using a handle rather than looking at the current user name that can be changed at the discretion of the account holder at any given time.
Posts and Details
Scammers may be able to emulate an original account holder but it is possible that they have got some details wrong. Therefore, investors on social media platforms should always check the account details and posts to see whether it is authentic or not.
When using a public WiFi network, it is possible that hackers pour into the personal computer or device of a user and manage to steal crucial information such as log-in information. Investors can prevent it by using a VPN or enabling a private browsing option if they have to connect to a public WiFi router.
There are some instances where scammers may use old videos or clips to ask investors to collect personal information from users.
AI Deepfake Scams
AI technology may allow scammers to publish fake messages using the Deepfake method to steal log-in information from users.
When it comes to portfolio management and securing accounts there are never enough preventive measures that an investor can implement. As technology is improving scammers are coming up with new ways to attack investors. However, investors also have a greater arsenal of preventive tools available at their disposal to secure their reserves.