Cryptocurrency security best practices: Protect assets

Intro note: Wallet safety is the cornerstone of cryptocurrency security. Your private keys are the keys to your kingdom; whoever controls them controls your funds.

• Use hardware wallets for long-term storage: hardware wallets store private keys offline and sign transactions without exposing keys to an internet-connected device. This is a core element of cryptocurrency security best practices.
• Separate hot and cold storage: keep the bulk of your funds in cold storage (offline, like a hardware wallet or paper/metal seed). Use a smaller, easily accessible balance on a wallet connected to the internet for day-to-day needs.
• Protect seed phrases and recovery phrases: write them down on durable, tamper-resistant material and store them in a secure location. Never store seed phrases digitally or online. If possible, employ a multisignature (multisig) setup when supported by your wallet ecosystem for added protection.
• Practice careful seed phrase handling: never share seed phrases with anyone, and beware of scams that request them for account verification. A single compromised seed phrase can compromise all holdings.
• Use unique passwords and password managers: for any wallet software or exchange account, use strong, unique passwords managed with a reputable password manager.

Two-factor authentication adds a critical layer of defense against credential theft.

• Enable 2FA on all critical accounts: Use an authenticator app (like Google Authenticator or Authy) rather than SMS-based 2FA, which is more vulnerable to interception.
• Consider hardware security keys: Where supported, universal 2FA hardware keys (e.g., FIDO U2F/WebAuthn) offer strong phishing resistance and are particularly valuable for exchange and wallet platforms.
• Don’t reuse 2FA across sites: Just as you don’t reuse passwords, avoid reusing 2FA tokens across different services. Unique 2FA configurations reduce cross-site compromise.
• Prepare backup access: Store backup codes in a secure location separate from your devices. If you lose your 2FA device, you’ll still need a recovery path.

Hardware wallets are a cornerstone of cryptocurrency security best practices for long-term holders.

• Choose reputed hardware brands: Research and select hardware wallets with robust security track records and strong community trust.
• Maintain supply chain hygiene: Buy directly from manufacturers or trusted retailers to avoid tampered devices. Inspect devices for physical tampering before use.
• Regularly update firmware: Keep hardware wallet firmware up to date to benefit from security patches and feature improvements.
• Practice safe transaction workflows: Verify recipient addresses on-device and verify network fees and amounts on the device screen before confirming.

Phishing remains a leading attack vector. Staying vigilant is a daily habit.

• Know the telltale signs: Phishing emails and sites often mimic legitimate services but use misspellings, unusual domain names, or pressure tactics. Always verify URLs and avoid clicking from unsolicited messages.
• Bookmark trusted domains: Use bookmarks for exchanges, wallets, and financial sites to avoid bait URLs. Do not click links in emails or messages purportedly from exchanges.
• Verify site security and certificates: Look for HTTPS and valid certificates, especially when entering sensitive information.
• Educate household members: Ensure that anyone who accesses crypto accounts understands basic phishing indicators and the importance of secure practices.

A trusted exchange is a critical part of your crypto security posture.

• Research exchange security and history: Prefer exchanges with strong security track records, transparent security audits, and robust incident response histories.
• Enable withdrawal whitelists and transaction confirmations: Use withdrawal address whitelisting so transfers can only go to approved addresses. Require multi-step confirmations for large moves.
• Use cold storage for the majority of assets: Keep most holdings offline, and transact only what you need for liquidity or trading.
• Regularly review connected devices and sessions: Revoke access from devices you no longer use, and monitor login activity for unusual sessions.
• Diversify exchanges and wallets: Don’t keep all funds on a single platform or in a single wallet. Spread risk across multiple secure solutions and platforms.

Redundancy and recovery planning are indispensable.

• Create multiple secure backups of seed phrases: Store backups in physically separate, secure locations. Consider metal seed backups to resist fire and water damage.
• Test recovery procedures: Periodically test that you can restore access from your backups. If you cannot restore access, you may lose funds permanently.
• Implement a documented incident response plan: Define steps to take if you suspect a breach, including revoking access, moving funds to cold storage, and notifying relevant parties.

Your devices are the gateways to your crypto assets. Maintain strong hygiene.

• Keep devices updated: Regularly install operating system and application updates to patch security vulnerabilities.
• Use reputable security software: Deploy antivirus/anti-malware on devices that access crypto accounts, and keep it up to date.
• Secure networks and hardware: Avoid using public Wi-Fi for wallet or exchange activity; use a trusted, encrypted connection (VPN as appropriate) and ensure routers are secured.
• Encrypt devices: Enable full-disk encryption on laptops and mobile devices to protect data if a device is lost or stolen.

For communities or larger holdings, additional measures can elevate security further.

• Multi-signature wallets and threshold schemes: Multisig can require multiple keys to authorize a transaction, distributing control and reducing single-point failure risk.
• Time-locked transactions and daily limits: Implement transaction limits and delays to create a window for detection and intervention if an unauthorized action occurs.
• Security auditing and third-party reviews: Periodic security audits and independent reviews help identify and remediate weaknesses before attackers exploit them.
• Education and culture of security: Build a culture where security is everyone’s responsibility, from beginners to advanced users.

Despite best efforts, breaches can occur. Acting quickly minimizes damage.

• Freeze access and move funds: If you suspect your accounts are compromised, secure them first, then move remaining assets to cold storage.
• Notify relevant platforms and authorities if appropriate: Contact the platform’s security team and follow their guidance for recovery.
• Preserve evidence for investigations: Do not erase logs or file artifacts that may help forensic analysis.
• Rebuild with lessons learned: After containment, reassess your security posture, update procedures, and reinforce training to prevent recurrence.