The document summarizes the history of cryptocurrency theft and losses, provides tips on securing cryptocurrency, and describes different types of cryptocurrency wallets. Specifically, it notes that in 2014 Mt. Gox lost 850,000 bitcoins worth $450 million, in 2018 Coincheck lost $533 million, and in 2019 Binance lost $40 million in a hack. It recommends using hardware or paper wallets for long-term storage, enabling two-factor authentication, and being cautious of information shown on devices connected to the internet. The document also describes online, mobile, desktop, hardware, and paper wallets and their relative security.
History of major cryptocurrency hacks and best security practices
1.
2. There is a history of
cryptocurrency being
lost or stolen
• Mt. Gox exchange in 2014. Approximately 850,000
Bitcoins belonging to customers and the company
were missing and likely stolen, which amounted to
more than USD 450 million at the time.
• In 2018, Tokyo-based cryptocurrency exchange
Coincheck lost approximately USD 533 million worth
in cryptocurrency.
• Just last May 2019, hackers withdrew 7,000 Bitcoin
worth about USD 40 Million at the time from
Binance via a single transaction in a "larger-scale
security breach."
Figure 1: The Binance hack
caused the price of the
cryptocurrency to slip drastically.
3. Use common sense and apply
necessary security principles to
protect your cryptocurrency
• Don’t use a cryptocurrency exchange for long-term storage.
• If you do, use two-factor authentication, preferably one that is not
limited to devices connected to the internet.
• For your hardware wallet, choose a PIN code that you can
remember, but is secure and not easy to guess.
• Keep your 24-word recovery sheet well secured and never enter it
on any device that is connected to the internet.
• Only trust what you can see on your hardware wallet screen. Verify
your reception address and payment information on the device.
• Always treat with caution information shown on your computer or
smartphone screen. Assume software can get compromised
anytime.
Figure 2: Two-factor
authentication is a good
security measure.
4. Use common sense and apply
necessary security principles to
protect your cryptocurrency
Tip: Personally, from time to time, I move
cryptocurrency from exchanges that I use for
trading to my desktop wallet, mobile wallet,
or a hardware wallet for long-term storage.
I also diversify risk by using more than one
exchange.
Figure 2: Two-factor
authentication is a good
security measure.
5. There are many different types of
cryptocurrency wallets.
Online Wallets (also known as "hot wallets"):
• Online wallets run on the cloud so they can be
accessible from multiple devices with an internet
connection.
• They are practical and convenient to use.
• However, they are also more susceptible to theft,
as is evident by many past hacks of online
wallets used by cryptocurrency exchanges
exemplifies.
• Besides utilizing online wallets provided by
exchanges, you can use your own such as
MyEtherWallet or Metamask.
Figure 3: MyEtherWallet
allows you to send ether
and compatible ERC-20
tokens.
6. There are many different types of
cryptocurrency wallets.
Mobile Wallet (also known as "warm wallets"):
• Mobile wallets are applications that run on
your smartphone device.
• They are very convenient because they are a
means of payment.
• Overall, mobile wallets are considered to be
safer than cloud-based, online wallets.
• Of course, there are still risks associated with
mobile wallets such as losing your crypto
assets in case your phone breaks down, gets
stolen, or becomes hacked.
• Examples of good mobile wallets are
Blockchain, Trust, Jaxx, and Mycelium.
Figure 4: The Jaxx multi-
cryptocurrency wallet
has a responsive design.
7. Recommendations
The Robinhood mobile wallet allows you to
invest Commission-Free! Invest in stocks,
ETFs, options, and cryptocurrencies, all
commission-free, right from your phone or
desktop.
Figure 5: The
Robinhood wallet
8. Recommendations
The Celsius mobile wallet allows you to get
10% annual interest or more on stable coins
such as TrueUSD (TUSD), Gemini Dollar
(GUSD), Paxos (PAX), USD Coin (USDC),
MakerDAO (DAI), and Tether (USDT). Plus, you
can also get an annual interest on other
popular cryptocurrencies.
Figure 6: The Celsius
wallet allows high
annual interest
payments on stored
cryptocurrency.
9. There are many different types
of cryptocurrency wallets.
Desktop Wallet (also known as "warm wallets"):
• Desktop wallets can be downloaded and installed on your
desktop or laptop device.
• These desktop wallets are considered safer than online
wallets or mobile wallets.
• However, you can still lose your crypto if your computer is
infected with a virus, gets hacked, or becomes damaged in
some way.
• Examples of good desktop wallets are Exodus, Atomic
Wallet, Bitcoin Core, and Jaxx.
Figure 7: The Exodus
multi-cryptocurrency
desktop wallet has an
intuitive interface.
10. There are many different types
of cryptocurrency wallets.
Hardware Wallet (also known as "cold wallets" or "cold
storage"):
• Hardware wallets store users' private keys typically on
a USB drive.
• Some even can make online transactions.
• However, most of the time, they are kept offline to be
secure.
• Examples of good hardware wallets are the Ledger
Nano, the Trezor, or the ColdLar Pro.
Figure 8 & 9: The Ledger
Nano and Trezor
cryptocurrency cold
storage wallet.
11. There are many different types
of cryptocurrency wallets.
Paper Wallet: Paper wallets are the safest option to store
your digital assets but not necessarily the most convenient
or practical to use.
Basically, a paper wallet is a physical copy of your
generated public and private keys and can even refer to a
printed sheet of paper.
You can send funds by transferring the cryptocurrency to
the wallet's public address, and you can withdraw or send
your coins by entering your private keys or by scanning the
QR code on the paper wallet.
Figure 10: An example of a
cryptocurrency paper
wallet.
12. Slide Title
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