The blockchain space is revolutionary, but hackers and scammers can take advantage of that
What are the best tips to stay safe on the blockchain without being a super expert in crypto or cybersecurity? Blockchain technology has become one of the most revolutionary inventions in the digital age. Bringing undeniable developments to authentication, transparency, and transaction processing, blockchain technology also opens up opportunities for malicious attacks on personal funds. In this guide, we’ll walk you through the most important cybersecurity tips in the blockchain space.
As a relatively new field, the blockchain space offers innovative functionalities but also opportunities for hackers to exploit bugs and code errors. Additionally, as users are still facing a lot of new processes, scammers can take advantage and control the crypto security of new users.
In order to feel better prepared and protected in the age of blockchain technology, check out the four tips below. These lay the foundation of cybersecurity in the crypto space.
Never share your crypto wallet passwords and seed phrases
The first and foremost in blockchain safety is protecting your wallet. Hot wallets like MetaMask are incredibly convenient and easy to use. However, one of the main concerns with such services is that they rely on just two password phrases for security. In this sense, hackers have a better chance of accessing your funds if they manage to access these phrases.
It is essential to always keep your crypto wallet password and seed phrase safe. Firstly, these are the only way to access your wallet if you ever have to install it on a different device. Secondly, these are the easiest way for hackers to get access to your wallet, and consequently steal your funds.
- Don’t store your seed phrase or passwords on public computers
- Always have a backup on paper, stored in safe or another secure location
- Never give anonymous people remote access to your computer
We’ve created another blog post in which we highlight the best wallets on the market. In that article, we talk about both software wallets and hardware wallets.
Consider a cold crypto wallet service
Building on the first tip, a reliable way to keep the majority of your crypto assets safe is through a cold wallet. While hot crypto wallets offer unprecedented ease of use, cold crypto wallets are significantly more secure. As these wallets only connect to the blockchain when plugged into a computer, the chances for a hacker to gain access to your funds decrease majorly. A cold wallet would for example be a hardware wallet by Trezor or Ledger.
Of course, a cold wallet holds other risks like physical or software damage to the device which will render your assets unusable again. Despite that, if you want a second layer of security for your crypto portfolio, it is recommended that you use both a cold and a hot crypto wallet.
Diversify your portfolio
Diversification is one of the first principles successful investors talk about. The same goes for crypto. However, diversification is also one of the best ways to protect your investment from a complete collapse. Unfortunately, as the crypto space is still new, there are projects that present themselves as interesting and trustworthy, but turn out to be scams.
There is no surefire way to determine whether a new token or dapp is a scam. However, diversifying your portfolio is one way to protect yourself from betting all your capital on the wrong project. If you have investments across numerous tokens or dapps, you won’t lose all your capital in the event one of them turns out to be a rug pull, for example. To easily monitor your portfolio at a glance, check out the DappRadar Portfolio Tracker tool.
Another form of diversification is using multiple wallets. Don’t use one single wallet to do everything, but split things up. Use one wallet for NFT trading, another for trading tokens, and perhaps a third one for holding assets. Wallet services like Metamask and WalletConnect make it very easy to create or import new wallets, allowing you to switch between different wallets swiftly.
Check the integrity of the dapps you’re going to use
Last, but definitely not least, you need to do your own research. Building on the previous tip, as the crypto space is in its early years of development, scam projects are unfortunately still thriving. In this sense, it is important to do a thorough check on any dapp or new project you are looking to invest in. Check their contract addresses, and explore their social media accounts.
Additionally, do some research on the team behind the project. If a project has not given any information about the development and management teams, this might be a big red flag. It is true that blockchain technology allows for complete anonymity, however, as the space is growing, there’s also a demand for transparency. Most successful crypto projects are very open about their creators and developers.
Stay safe in crypto!
The crypto space is still in its early stages of development. This is a tremendously exciting time to be starting out with blockchain technology, as the opportunities are close to boundless. However, staying safe, and protecting both your identity and your investments on the blockchain is key to your personal success in the space.
Follow these tips, and read up on as much information as you can before jumping in and making an investment. If you want to find out more about crypto wallets, cybersecurity, and protecting yourself on the blockchain, check out these handy articles on DappRadar.
Additionally, to get the latest data and news from the blockchain space, browse around DappRadar Rankings, and the DappRadar Blog. Follow DappRadar on Twitter and join our Discord community for the latest updates on all things blockchain.