Top 9 Crypto Security Mistakes to Avoid
Everyone makes mistakes. But not every mistake will cost you a fortune like it will in cryptocurrency.
While we have already written several articles about what you should do to keep your cryptocurrency safe, we now find that it is time to talk about what you shouldn’t do. Read on to learn about the top cryptocurrency security mistakes to avoid.
The Worst Cryptocurrency Security Mistakes to Make
1. Not Recognizing Phishing Attempts
Phishing attempts are the number one way that individuals lose access to their cryptocurrency. It starts with a legitimate-looking email, as well as a link and some sort of message telling you that you need to check your account right away.
Don’t do it, it’s a scam.
There is never, ever, ever a reason to click a link that ends up in your email inbox unprompted (basically, if you haven’t requested a password reset, there should never be one there). So, if you see any email with a link, stop, and use your app to check your account if you are really nervous (remember, go to the app yourself, do not click the link), and you’ll likely find everything is okay.
Other ways to spot phishing attempts include checking the sender’s email, calling the company the email claims to be from (using a number from the website, NOT the one in the email), and ignoring it and seeing what happens.
2. Not Using MFA
Single-sign-ons are a thing of the past, and if you are still using them, you shouldn’t be. It is very easy for a single hack to reveal usernames and passwords. What hacks won’t reveal is the QR code for your MFA tool. If you don’t like the extra step of MFA, then you are making one of the worst cryptocurrency security mistakes known to man.
3. Sharing Your Seed Phrase
Do not share your seed phrase with anyone. This will allow whoever you share it with to steal your cryptocurrency. Instead, check out our list of 10 ways to safely store your seed phrase if you absolutely feel that you must keep a record of it somewhere (as you should).
On this note, never share your private key with anyone, either. Or reuse passwords.
4. Investing Without Proper Research
As we have already made it clear time and time again on our blog, the cryptocurrency world is full of scams. If you are involved in investing in cryptocurrency, then you will need to take the time to familiarize yourself with common scams so you can ensure you don’t get caught up in them.
Additionally, any time a new investment pops up on your radar, you need to do some deep investigating before you spend a single dollar. We are talking, checking the website, the whitepaper, and doing a Google search. You shouldn’t invest in anything you don’t know a plethora of information about.
5. Trusting a Centralized Exchange
While a centralized cryptocurrency exchange like Binance or Coinbase can be a great way to get started, remember that they aren’t always safe. Not only do exchanges frequently get hacked, but they can also go bust (like FTX), leaving customers with no sign of their money.
Although we are reasonably certain it is okay to trust Coinbase, we still recommend transitioning to a hardware wallet as soon as possible, that way if worse comes to worst, you still have your crypto.
6. Not Storing Your Hardware Wallet Somewhere Safe
The problem with hardware wallets is that just having one with your crypto on it is not enough. You also need to take the time to store your hardware wallet safely. It’s small enough that a dog could eat it, or that it can get lost and accidentally be tossed in the trash (you laugh, but both have happened).
We recommend taking the time to know where you will store your hardware wallet before investing in one. A safe, or a bank safe deposit box are some of the safest places.
7. Skipping Firmware and App Updates
Any cybersecurity professional will tell you that the number one way individuals find themselves in trouble is because they ignored required updates for their phone or computer.
Required updates often close technological loopholes or security holes that the operating system authority has taken the time and energy to discover. Once the update is available, the holes it closes are made public, meaning the clock is ticking for you to keep yourself protected.
While this doesn’t matter as much for those using hardware wallets, this can be detrimental to those using software wallets or accessing a CEX on their mobile phone.
8. Trusting Someone You Shouldn’t
Investing in cryptocurrency is a highly personal choice, and the true benefits should be yours alone. If someone is pressing you to buy a cryptocurrency or an ICO because it is “good for everyone” or “we will all make $$”, this is a massive red flag.
Anyone selling you something, or trying to, has something to gain from it. Do your digging because it might just be a cleverly disguised scam.
9. Not Verifying a Public Key
This one isn’t quite as bad as some of the others on the list, but many people have accidentally sent large amounts of crypto to the wrong person. Unlike banking, where there are multiple ways to ensure your money is going to the right place, with crypto, you only have a single public key, which is a string of numbers and letters.
So, before you just blindly attempt to free-type the public key, take a moment to ensure you are really sending the cryptocurrency to the right place. If you are with the individual in person, scan the QR code whenever possible. Otherwise, make sure you double and triple-check the number before sending. Because once your cryptocurrency is sent… It's gone forever.
Overall, using cryptocurrency isn’t inherently dangerous, as long as you aren’t making every mistake on this list. Just be sure you take the time to do things right; otherwise, you could amass a fortune only to lose it because of a stupid mistake.
