Protect your crypto

Today we will talk about security. Specifically, how and where to store your assets, what you categorically cannot do, and what are the myths about crypto security.

Security of an exchange account

Let's start with tips about centralized exchange, because most of users start their acquaintance with crypto. We will consider everything using the example of the most popular exchange, Binance.

Create a complex password
Yes, the easiest tip. Everyone knows it, but not everyone uses it. Create a strong password with numbers, letters, and special characters. And most importantly, use it only once.

Put two-factor authentication (2FA)
One of the most important points. Here we can use 2FA via SMS and Google Authenticator.

Set anti-phishing code in the mailing list
Needed in order to ensure that you have not slipped any malicious link in the mail. Enter the code now each letter from the exchanger will come with this code.

That is, if you entered code "1234" and Binance sent you a letter without this very code - then it is a scammer.

Whitelisting your wallets
When this feature is enabled, your account will only be able to withdraw to whitelisted addresses.

Monitor your account activity
Periodically check the activity of your account. If you notice activity when you don't use the exchange - change passwords and emails.

Do NOT keep all of your funds in an exchange
All of the funds you have in the exchange are not in fact your funds. It is only a record in the exchange database, and it is not much different from a regular bank account. They become yours only when you withdraw them to your cryptocurrency wallet. So, if you decided to invest a large amount of money for the long term, immediately after registering with Binance, create a wallet, where you can deposit everything you bought on the exchange.

What are the risks of holding assets in an exchange:

- Exchange may block all users of a particular region due to legal pressure

- An exchange can be hacked and all the assets stored there can be withdrawn

- The exchange may turn out to be unscrupulous and screw all of its users, taking all the money invested in it

Wallet security

Do not give your seed phrase to anyone.
As soon as you start to create your cryptocurrency wallet - a seed phrase consisting of 12-24 will pop up. Be sure to write it down.

Your seed phrase is the key to your wallet. If someone recognizes it, they will get access to your money. That's why it's highly discouraged to write down your seed phrase in notes on your phone or in your favorite Telegram messages. Also never share your phrase on websites, in chat rooms, don't even give it to a friend.

Use a piece of paper or a password manager and write your phrase there. If you are still worried about the security of the phrase, you can divide it into several parts and save it in different places.

Double-check where you transfer crypto
Double-check the address where you transfer funds several times. Any blockchain has built-in means to check addresses for correctness, and if you make a mistake somewhere, your transaction most likely won't happen. But it is better to double-check everything yourself.

Even when withdrawing funds to your wallet, you may notice such a column as "MEMO".

MEMO (TAG/MESSAGE/PAYMENT ID) is needed only when you transfer funds to exchanger!

It is not profitable for big exchangers to make a pile of addresses for each new user, so each user can get MEMO in addition to wallet address.

If we are talking about personal wallets - then everything is simple. Forget about MEMO, the entire wallet is yours, just skip this input field.

Test the new thing
If you're making cryptocurrency transactions for the first time in your life, there are a lot of doubts about whether you're doing it right, whether your money will disappear now, and all that kind of stuff.

The most proven way to get rid of doubts is to check everything on a small amount first. Nothing bad can happen if you pay $1 more for commissions, and that's better than risking all your money and making a mistake.

Also, there is a huge number of testnets in crypto, where you can dabble with all the possible transactions without the risk of losing your investment.

Do NOT store "wrapped" coins
A wrapped coin becomes wrapped when you bridge it from the native blockchain to the foreign blockchain. When this happens, the coins are blocked by the bridge on the native blockchain. And on the blockchain where you transferred it, you get a similar number of "wrapped" coins, which are tokens.

For example, we decided to bridge SOL coins from the Solana network to the Ethereum blockchain. Now your native SOL is blocked on the bridge you used, and your Ethereum wallet received SOL wrapped coins.

What is the problem with such coins? Centralization. If the bridge is hacked and all the funds are stolen, your wrapped coins will turn into bills because their collateral in the form of blocked coins in the bridge will disappear.