Bitcoin is about taking back power over money. The power that bitcoin gives you back has incredibly positive implications for your life, as allowing you to live on your terms . But you know that with great power comes great responsibility.
That's not me saying it, that's Ben Parker, Spider-Man's uncle.
Ben Parker could have been a bitcoiner. In fact, bitcoiners are gaining a lot of power with their BTC. But to be able to take full advantage of it in the future, they need to take responsibility for the security of their BTC. With the Bitcoin system, you are responsible for the fruits of your labor.
That means following a few basic rules to make sure you don't make mistakes you'll regret forever. Here are 8 security tips I urge you to follow to protect your bitcoin.
1. Set up two-factor authentication for your accounts
In most cases, you will buy bitcoin through exchange platforms. You will need to create accounts on these exchange platforms. You will then enter personal information to meet their KYC (Know Your Customer) policy requirements.
You will identify yourself on these platforms with an email address.
Now, let's imagine that this email address was revealed in a massive Facebook data hacking program like the one that was just revealed in early 2021.
Hackers of all kinds may be tempted to gain access to your email address. Once they gain access to your email, they may very well have access to your account on these trading platforms. It would then become easy to steal BTC or get your banking information.
To prevent this, you should definitely enable 2-factor authentication (2FA) for your various accounts. This applies to all your accounts on web platforms, not just those on cryptocurrency trading platforms.
Avoid using 2-factor authentication based on sending SMS. In fact, phone numbers can now be easily hacked. It's safer to use a third-party authentication app installed on your smartphone, such as Google Authenticator.
You can even take it a step further by using the Universal 2nd Factor (U2F) method developed by Google and Yubico. This method relies on physical USB or NFC devices to allow you to log in after you enter your email and password.
2. Store BTC in a refrigerated place
In the world of bitcoins, there is one golden rule you must remember:
"Not your keys, not your bitcoins."
You really only own BTC that you have private keys for. Until you have the private keys for your BTC, you have nothing. You trust a third party to ensure the security of your BTC.
If that third party decides to take your BTC for some arbitrary reason, you can't do anything.
You should therefore leave BTC on exchange platforms as little as possible. After making your BTC purchases, transfer your BTC safely to cold storage, such as a hardware wallet.
Be careful never to lose your start phrase, which will allow you to restore access to your BTC if you lose or damage your hardware wallet.
3. Protect your privacy and anonymity
Transactions on the bitcoin network are recorded in blocks on its Blockchain. The latter is without permission and without trust. Anyone can read its contents.
However, the transactions made are under an alias. This means that only addresses are displayed. Your identity is not directly registered in the Bitcoin Blockchain.
Here is an example of a bitcoin network address:
bc1qx9t2l3pyny2spqpqlye8svce70nppwtaxwdrp4
As long as your address is not linked to your identity, your anonymity is preserved.
If one of your bitcoin network addresses is linked to your identity, all your transactions can be traced.
When you buy bitcoin through a trading platform like Coinbase or Kraken, as you send those BTC to your hardware wallet, the platform has the ability to link your identity to that address on the bitcoin network.
Bitcoin Blockchain analysis software can then determine if the address belongs to a larger cluster of addresses that you have. This can lead to revealing how much BTC you own in total and all your past transactions.
The companies that are constantly analyzing the Bitcoin Blockchain are also storing all sorts of information, such as IP addresses, for example, to try to get even more information.
You should always keep in mind that if you don't take specific precautions to protect your privacy on the bitcoin network, you should assume that all your BTC transactions could be linked to your identity sooner or later.
So I encourage you to make protecting your privacy and anonymity on the bitcoin network a priority. There are various solutions for this, such as Wasabi or Samourai software wallets, so that your identity cannot be linked to transactions on the network.
All the answers to your questions in this area can be found in this special article:" Four key questions about bitcoin privacy and anonymity are answered ".
4. Never disclose how much BTC you own
As a big fan of the movie " Fight Club ", I wrote an article last year revealing the existence of a bitcoin club. I took the time to reveal the 8 basic rules of this Bitcoin club .
Here are the first two:
- Rule #1: Do not disclose what you own in bitcoin.
- Rule #2: Don't disclose what you own in bitcoin.
This rule is repeated twice so that all Bitcoin Club members keep in mind that you should never disclose how much BTC you have.
That would just put you in danger. People with bad intentions could try to steal the fruits of your labor, virtually or even physically.
So be careful as you apply these two golden rules to the letter.
5. Use multiple emails for different accounts
A good way to limit the effects of your email account being hacked is to use multiple email accounts for your different cryptocurrency platform accounts.
When it comes to passwords, you should use a password manager that will allow you to avoid using the same password on multiple different platforms.
This way the consequences of a hack will be more limited. This practice is valid even if you are not involved in the bitcoin world.
6. Bookmark websites to prevent phishing
We can't say it enough, but when transacting with bitcoin or when connecting to cryptocurrency platforms, you have to be careful about phishing like the plague.
Some viruses have been created that will go in and change the bitcoin network addresses that you copy to your clipboard.
It is good practice to check and double check the addresses you enter. Then check once and for all sites on the platforms you are connecting to. That way you'll be sure you've gotten to the right site when you click your bookmark.
This will better protect you from phishing. For the rest, the same practices as usual apply here. Never click on unfamiliar links in emails, and never enter personal information that has been requested by strangers.
7. Use a VPN
Companies have been established to continuously analyze the Bitcoin blockchain. They store a lot of information about what is happening on the network, such as the IP addresses of the participating sites. The goal is to be able to extract as much information as possible about the parties involved in a bitcoin transaction.
To protect against this, you should never expose your IP address on the Internet. Use a VPN solution that will allow you to remain anonymous on the internet.
Again, this advice goes beyond the world of bitcoins. But if you haven't done it before, it becomes imperative that you do it now that you are responsible for the security of your wealth.
8. Have a properly configured antivirus and firewall on your computer
The price of bitcoin continues to rise. As a result, people with BTC are ideal victims for people with malicious intent to steal online.
Many malicious programs have been developed to change the addresses you save to your clipboard, or to use your computer's computing power to mine bitcoin without your knowledge.
To protect yourself from these malicious programs, I advise you to properly configure your computer's antivirus and firewall. This is one of the things you need to do to protect the fruits of your labour.
Final thoughts
Bitcoin gives you power over what you own. From that point on, you can live your life on your terms. This comes with a trade-off: it's up to you to keep what you own in bitcoin.
Nothing insurmountable, but there are a few best practices to follow. In this article, I've outlined 8 security tips you should follow no matter what. If you want to take full advantage of the bitcoin revolution in the coming years, you'll need to do just that.