If you want to fully immerse yourself in the cryptocurrency world, becoming a proficient user is paramount.

Learning how to utilize a wallet and safeguard its security is essential, as the responsibility for your wallet's safety ultimately lies with you.

Unlike centralized financial systems where control rests with a central authority, in the realm of cryptocurrencies, you have full ownership and control over your assets.

To truly own your assets, mastering their security is imperative, especially given the prevalence of scams due to limited awareness surrounding wallet operational security (Opsec).

This article serves as a straightforward pathway to mastering Wallet Opsec, enabling you to take control of your assets and shield them from potential hacks.

Firstly, let's explore the different types of wallets available and discern which one best suits your needs based on factors such as price, user comfort, complexity, user interface/experience, and ownership

Hot Wallet vs Cold Wallet

First let’s see how many types of wallets are there and which one you should choose on various basis (price, comfort, complexity, ui/ux, ownership) to ensure maximum safety.

• Cold Wallet

• Hot Wallet

Cold Wallet

Cold wallets are the physical (hardware) wallets used to store cryptocurrency offline.

Offline → Not connected to the internet.

Highly secure → Impossible to hack due to its offline nature.

Complex UI/UX → Less convenient for tech-savvy people.

Good for → holding large amount of crypto for long period of time.

Costly → Expensive than Hot Wallets

Example: Ledger Nano X, Trezor

Hot Wallet

Hot wallets are the software wallets used to store cryptocurrency online.

Online → connected to the internet (exists as browser extension)

Less secure → Susceptible to various online hacks and phishing scams

Easy UI/UX → Very convenient to use even for normal people

Good for → holding small amount of crypto and everyday use to access DApps online.

Cheap → Less costlier (mostly free) than Cold Wallets

Example: Phantom, Metamask, Rainbow

Which one should you choose?

You should consider leveraging the benefits of both hot and cold wallet.

Use hot wallet for managing small funds’ frequent use of connecting wallets to DApps and it is also free in most cases.

For storing large amount of funds or long time holdings, you should consider more secure option which is cold wallet.

Use the combination of both wallets to get the best of both worlds.

What is Seedphrase?

Seedphrase is the “master key” to your digital asset in set of 12 or 24 random words.

It is the analogous to your private key, as private key being too complex, precise and risky to store, this seedphrase comes in handy.

But remember, keep it safe with you offline.
Don’t share it with anybody or online, loss of seedphrase means complete loss of funds.

Do’s

• Write it on paper and hide it in secure private location which only you can access.

• Memorize it (risky but optional)

• Engrave your seed phrase onto fire and water-resistant metal plates.

• Keep multiple copies in multiple secure location (to avoid single point of failure)

  Consider using Shamir's Secret Sharing for advanced security, splitting your seed phrase into multiple parts and requiring several parts for recovery.

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BE TRANSACTION VILIGANT

It means being careful doing any transaction and to identify any suspicious activity.

To be Transaction Vigilant, you should be able to:

• Recognize Phishing Scams

• Verify Addresses Before Sending

• Recognise Insecure Platforms and DApps

• Maintain Transaction Privacy

Recognize Phishing Scams

Phishing scams are online scams aimed to trick victims into revealing sensitive information such as seedphrase, personal details, credit card details etc which gives scammer access to your funds.

Some ways to recognise phishing scams and be alert when you spot any of them while browsing:

• Suspicious Links and Attachment

• Urgent and Scarcity

• Generic Greetings & Poor Grammar

• Requesting Personal Information

Some actions you can take when you encounter any of these scams:

• Verfiy the sender info

• Don’t respond to that suspicious email or message

• Keep your software and browser updated to the latest security patch

Verify Address Before Sending

Another important measure you can take to avoid falling victim to these scams.

Use Blockchain Explorers like Etherscan or Blockchchain.com to verify the existence and validity of sender’s address.

Double Check the address to avoid typing error. (Addresses are case sensitive)

Exchange Wallets like Coinbase/Binance warns the user if the format is incorrect which also helps avoiding the error.

Avoid Insecure Platforms and DApps

To avoid getting scammed you should be able to spot these insecure platforms and Dapps when visiting them. Following factors to look for:

• Reputation & Review: Go through the reviews of that Dapp and research its reputation among the crypto-landscape before connecting your wallet.

• Transparent and Open Source: Always a good sign.

• Active Community: Look at their activity level of discord and twitter accounts, if active then asking for support would be easy once things gone wrong.

• Audited: Check ff the Dapp’ Smart Contracts are audited by the reputable audit firms or not.

Maintain Transaction Privacy

Many blockchain platforms are tranparent with all the transactions publicly viewable on the ledger.

For maintaining Privacy → Use Privacy Focused Blockchains like Monero or ZCash

Also, you can use Decentralized Exchanges like Uniswap.

Extra tip would be to use multiple wallets to avoid single point of funds’ loss and privacy in general.

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MALWARE MAYHEM

Malware → malicious software designed to harm or exploit any device, service or network for purpose to extract data for financial gain.

Phishing → type of cyber attack that targets victims through email, text messages, phone calls, and other forms of communication. It aims to trick into falling for the revealing sensitive information for financial gain.

Anti Malware Software

It protects the system from malicious software like viruses, trojan horses etc by regularly scanning your device.

Can prevent data breaches and financial loss by eliminating the unexpected viruses in the device.

Examples: Kaspersky, McAfee

Phishing Software

It protects the user from phishing scams by identifiying the suspicious emails, alerting the user and blocking the suspicious links and website.

It prevents identity theft and potential financial loss which could be caused by the scammer once you take action on any phishing hook.

• My tip would be to use both software combined and keep them updated.

Browser Security Essentials

The easiest and most used doorway by the scammer to get into victims’ system is through their “BROWSER“.

It becomes super important to keep your browser in check and consider these options for better security:

• Block Popups and Redirects

• Do not track cookies

• Carefully review permissions

• Double Check URLs → Most Phishing Occurs through this

• Only download from trusted sources

• Use public wifi with caution

• Clear Browsing Data Frequently

• Use Security Focused Browsers like Brave

Keep your Software Updated

This is very important as the outdated sotfware often contains vulnerablitites that hacker can exploit to gain access to your device.

Do’s

• Enable auto updates

• Check for new updates and bug fixes

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USING “CRYPTO SOCIAL MEDIA” CAUTIOUSLY

Maintain Anonymity

Always try to avoid online bragging about your overnight crypto bull gains.

This could make you a potential target of hackers.

You can share the non financial aspect of your portfolio and experience but try to minimise the personal information exposure.

Some hacks to use:

• Use Psuedonyms and Avatars: Choose a memorable username and unique avatar to maintain anonymity

• Avoid sharing your personal information and linking real life social media accounts

• Use VPN to stay anonymous on the web server

Minimize the Wallet Exposure

• Use Multiple Wallets

• Use Hardware Wallet (Cold Wallet)

• Avoid sharing your public wallet address on social media

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BEYOND THE BASICS

Multisig Wallet

Multi-Signature Wallets requires multiple private keys to authorise a transaction

Even if one key is compromised, then the funds remains safe.

Provides Extra Security:

• Difficult for scammer to find multiple keys to access funds

Shamir Secret Sharing

This mechanism splits the private key into multiple shares.

To reconstruct the key, a certain number of shares are required ( n of m ).

Also a reliable way to store the funds and to avoid single point of failure.

Offline Signing Tools

These Tools allows you to sign the transaction without your private key touching the internet.

It reduces the risk of key compromise as it is unexposed to the internet.

Examples:

• Hardware Wallet: Physical Device to store private keys and sign transaction

• Air Gapped Wallet: Software Wallets where private key signing happen on computer isolated from the internet.

• Paper Wallet: Private key printed on piece of paper using BIP38 Encrypt

• Multisig Wallet with offline signing

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To summarize, key points of safeguarding your wallets’ assets :

• Use both hot and cold wallet for your specific needs based on fund size, frequency of usage and security level.

• Write your seedphrase offline on paper or metal plate, store it in multiple secure location and never ever share it with anyone.

• Never click or respond to suspicious mails or websites (case of phishing scam)

• Verify the address before making any transaction

• Keep your software and browser updated

• Research the reputation of the Dapp before connecting your wallet

• Install Anti-Malware Software on your system to avoid virus

• Try to be psuedo-anonymous and don’t brag about your crypto bull profits

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By following these guidelines and staying committed to security best practices, you can confidently navigate the exciting world of cryptocurrency with peace of mind.

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