As it is today, holding or to use a very common expression in the crypto-sphere, HODLing Bitcoin & all other altcoins may seem like a tedious and quite stressful endeavor.
Indeed, the Internet is full with countless reports of hacked exchanges and crypto wallets, social engineering schemes, not to mentions HODLers fooled by fraudsters, Bitcoin ransomware attacks, and cryptojacking – unauthorized use of computer power to mine cryptocurrency, mostly Monero.
Don’t worry though; it’s quite alright if you feel overwhelmed. Most experienced crypto users felt the same way when they got started. Luckily for you, there is much more information on the web concerning online security, compared to the early years of Bitcoin. Therefore, you may not need to make any mistakes to understand security truly. All you have to do is sit back, read this blog post, and follow our recommendations.
Remember, the information you will receive in the next few minutes is based on valuable lessons learned from the past… and present.
Almost five years ago, the crypto world got gox’ed.
For those who don’t know, Mt. Gox was the first major cryptocurrency exchange that handled over 70% of all Bitcoin transactions at its peak, in 2013. Many users kept their bitcoins on the exchange, at that time, not worrying about what could happen.
Unfortunately for them, in February 2014, Mt. Gox suspended its trading activity and filed for bankruptcy after announcing 850,000 BTC were missing and likely stolen.
Interestingly enough, the theft didn’t occur in just one day or just before the bankruptcy; hackers actually stole all these bitcoins over time, starting from 2011. Mt. Gox didn’t report the thefts until the bankruptcy.
Not much has changed since then… on the contrary, since Bitcoin is much more visible and present in the mainstream media, the attacks are much more frequent.
According to a recent report from CipherTrace, hackers stole $1.7 billion worth of cryptocurrencies, in 2018. A whopping $1 billion were stolen directly from exchanges.
That is why we strongly recommend avoiding exchanges or other potential ‘easy’ targets like online hot wallets if you want to play the long game aka HODL. Use exchanges only if you want to actively trade your coins.
Since the exchanges are not safe, where could a HODLer keep his/her crypto, though? On his/her everyday computer/laptop maybe?
That could be a genuinely more secure alternative only IF you use a hardware wallet.
What is a hardware wallet? It’s a USB-like device that can securely store your private keys. In other words, if your computer is infected, your hardware wallet won’t be compromised. No malware can access the hardware wallet, where your private keys are. As long as the private keys are safe, so are your cryptocurrencies.
Hardware wallets like Ledger or Trezor are also easy to use. You can transfer funds from your secure wallet to an online Bitcoin casino like BetBTC Casino for example, at any time, in a few easy steps.
If you are more of a tech guy and you want to dig deeper into how cryptocurrencies work, you can also use a cold storage to securely HODL your funds.
Hardware wallets are reasonable secure and a form of cold storage, but they are not 100% bulletproof. Moreover, what we are about to describe as cold storage isn’t 100% safe, but will make the hacker’s experience to steal from you, a living hell, without a doubt.
Cold storage refers to a computer that isn’t connected to the Internet or other vulnerable network. The hacker needs a connection to the computer where you HODL your crypto and since there is no connection, the attacker can’t actually do much.
You can use an old laptop as a cold storage, or even a compact Raspberry Pi. Format the device before turning it into a cold storage, install a Linux-based OS (avoid Windows since most malware is Windows compatible), and install the wallet that has cold storage capabilities, afterwards.
Electrum is such a Bitcoin wallet; for Ethereum, you can actually download MyEtherWallet website from the official Github and then create a wallet offline.
Transferring crypto is a much more tedious process than using a hardware wallet and it involves going back and forth between the online device and your cold storage. You can use a USB for storing information but if that USB is compromised, so will the cold storage. As a safer alternative, you can make use of a camera and the QR code.
Besides using a hardware wallet or other cold storage option, the following tips will definitely help your crypto funds and drive the hackers away.
A general rule that applies to crypto also, involves passwords. Avoid using simple, general passwords for all your wallets.
Instead, use a popular Password Manager and generate a new password for every cryptocurrency wallet you create. Generate an unintelligible password with letters – capitals included – numbers, and special characters to be on the safe side.
Furthermore, when you need to save the seed for a Bitcoin wallet, avoid storing that seed on a computer, even if it is a Password Manager.
An attacker only needs a master password to access your manager and, in case that happens, let him find out just your passwords.
Instead, write the seed on a piece of paper and hide it from plain sight.
Better to be safe than sorry.
In 2017, during the Bitcoin & altcoin hype, there was a malware that once installed on a computer, it stood idle until the user opened a Bitcoin wallet. The malware would wait until it identified a copied Bitcoin address and would change that address with another one owned by the attacker, in a blink of an eye.
As a result, the unaware HODLer would paste a different address in the recipient’s box, sending his bitcoins to the attacker and NOT to the intended recipient.
What did the crypto users learn from that lesson? Always check the address pasted is the same as the address copied. Check the first and the last several characters from the pasted address and compare them with the copied address, as a rule of thumb.
Take advantage of the two-factor authentication whenever you have the possibility.
It doesn’t matter if it’s for an exchange, an online wallet, or even your hardware wallet. Add this extra layer for more security and you won’t be sorry. Be sure to backup the 2FA in case something happens with your smartphone. Alternatively, you can use a desktop 2FA software or the popular YubiKey (USB- and NFC-based 2FA).
Make good use of all these security tips we’ve just gave you, so you can have an easier time HODLing and gambling with Bitcoin.
Enjoy and best of luck in our innovative online Bitcoin casino!