Blockchain technology has revolutionized how we define, store, and transfer assets, offering unprecedented security and transparency. However, as with any deposit, be it a bank, a stock, or a wallet in hand, there are always risks and vulnerabilities to be acknowledged and proactively managed. Below there are provided 4 points that may help you secure your on-chain belongings.
1. Invest in reliable projects developed by credible teams.
Investing assets in reliable projects developed by credible teams is one of the best ways to avoid rug pulls and keep your assets safe. Whether it is for an individual or a venture company, conducting thorough research and selecting the right project or partner is always the first task to be completed. Such a pedigree is almost a guarantee that not only will there be no rug-pulling, but that some achievements can also be expected from the team, and that the investment may turn out highly rewarding.
2. Choose a secure blockchain.
NFTs and cryptocurrencies are not stored in a wallet but on a blockchain that the wallet can access using a private key. Hence, a secure blockchain is also essential for one’s asset safety. But not every blockchain that can be found out there is secure. Fundamentally, the security of a public blockchain is based on a large number of participants and the value of the underlying cryptographic currency.
As can be seen in this schematic representation of the Bitcoin ecosystem, more users lead to increased security. And increased security in turn increases the Bitcoin price. All this is ultimately a self-reinforcing cycle in which the users and the value of the underlying currency guarantee the security of the blockchain. This also means that a vulnerability would cause the value of the crypto currency to drop almost instantaneously to zero. This makes altcoins Bitcoin price a good indicator of the security of the system.
3. Secure your wallet (as well as the private keys).
First and foremost, use a strong password to encrypt your wallet. This will help prevent unauthorized access to your wallet and the assets it relates to. You can also choose a hardware wallet (also known as a cold wallet). The hardware wallet is a physical device that is not connected to the internet and is, therefore, less susceptible to hacking attacks and other vulnerabilities typical of internet-connected data.
Another tip for keeping your wallet secure is to regularly back up your wallet and store your backups in multiple locations. You can, for instance, use multi-signature security to maintain control of your coins even if one of your devices is compromised; or you can generate, write down and hide your wallet’s mnemonic seed — a string of words that can be used to restore your wallet in the event of a hardware failure.
Last but not least, keep your private key to yourself and do not share it with anyone else. No blockchain trade requires you to disclose your private keys to fulfill, so be wary of any who claims the opposite. Otherwise, you may run the risk of losing control of your private key and all assets to which it has access.
4. Ensure network security.
Apart from the three points mentioned above, network security is another equally important factor that gets frequently overlooked. Ensuring network security embraces many trivial matters, including being aware of phishing sites and other scams, using a secure Wi-Fi connection (never connect to your online wallet, exchange account, or another critical security point via public WiFi that lacks strong encryption such as the WPA-2 protocol), and double-checking crypto addresses before transferring any assets. All these might seem as well-worn advice or obvious recommendations, yet they are constantly relevant to the security status of your blockchain assets and require caution at all times.
