Security. How Hack Proof Are You? – Luke L
Quick lesson here. Cryptocurrencies can be stored in two ways. Online (“hot storage”) or offline (“cold storage”). Online means your computer is connected to the internet and you can send coins back and forward. Offline means its disconnected / unplugged. The benefit of offline storage is that you can’t be hacked remotely. Someone would have to physically steal your computer and hard drive in order to get your coins, they can’t remotely hack in. They would also of course need your private keys.
Mt Gox did use cold storage, the problem is that they didn’t do it very well.
Coinbase on the other hand do things very differently ( I always recommend Coinbase to newcomers to the space). They recently bought a custody company called Xapo. They store Bitcoin in vaults under Swiss mountains. These are old swiss military bunkers in undisclosed locations. Not only do they protect from theft, they also protect from nuclear explosions and electromagnetic attacks.
Things have clearly moved on from the Mt Gox days. Hopefully you feel a little more confident in the ability for exchanges to maintain security now?
In fact this confidence is critical for the future viability of the cryptocurrency space. Institutional investors, who are the potential big players, have a hard time trusting the custody and storage aspects of cryptocurrencies. You can’t blame them given the Mt Gox incident. Hopefully however, these James Bond style Swiss vaults are a step closer to giving the confidence they need.
We obviously won’t be storing our coins in underground Swiss bunkers. We won’t get that access. We can live safe in the knowledge that the Billionaires are safe, but what about us normal folk who use our phones and computers?
There’s a couple of things we should all be doing, and this applies to all aspects of financially security, i.e. any account that gives access to financial information.
With so many data hacks globally, the chances are that your usual password, or some variation of it, is out there. If you use a similar password for everything, it won’t be too hard for the wrong person to crack it. The solution is simple, use a password manager. These are systems that generate strong and unique passwords for every service you use.
I use Apple products (iPhone, iPad etc) and there is a password manager inbuilt. I use it. You likely have one inbuilt too. As always, do some research and find a product that suits your needs. Maybe its the one built in, maybe it’s something else. However, I can’t stress enough given the continuous global data hacks, that you use one of these tools.
You likely use this already on systems such as your banking app or for password recovery. It’s a secondary method of authentication. You either receive a text message with a code or you use an app which generates a unique code. The idea is that as well entering a password, you also use the”code” to verify your identity and access the system, usually from your phone. This proves, to a higher level at least, that it’s you. Many systems use this already and rightly so. If you are ever given the option of adding this security method, then do so. It might be a pain in the ass, but ultimately it’s there to protect you. In the crypto space, it’s essential.
Sadly not. I don’t want to end on a low but these tools are not rock solid. If someone really wants to hack your life, they can find a way. They can “sim swap” your phone and gain access to your credentials that way. They can threaten you or do multiple other things to gain access to your information. I guess that’s why underground bunkers exist for the billionaires. However, these are unlikely scenarios for you and me.
Let’s just start with the simple methods. Use a password manager, use two factor authentication, be sensible. Those few things will put you in the top 1% of the population in terms of security.
Published at Thu, 05 Sep 2019 12:30:48 +0000
Bitcoin Pic Of The Moment
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By trendingtopics on 2019-03-19 12:38:48
