As cryptocurrency use is rapidly growing, so too are security and privacy risks. In January, Kevin Rose, the founder of Proof, lost over $1 million worth of NFTs to a wallet compromise. In such an environment, “privacy” doesn’t mean evading the law, but rather protecting your digital identity, bank account, and crypto funds from hackers, scammers, and data leaks.
Cryptocurrencies are growing in popularity in low and middle-income countries. Owners can lose bitcoin and other cryptocurrency tokens due to thievery, computer failure, loss of access keys, and more.
Currently, India imposes a 30% tax on crypto earnings and a 1% TDS on many transactions. Furthermore, many crypto exchanges are required to register with the Financial Intelligence Unit-India. If you invest or trade in crypto, be sure to follow these practical privacy and security tips to stay safe. In this guide, we’ll explore the best ways to store and secure your cryptocurrency.
What Is Crypto Cybersecurity?
Crypto cybersecurity encompasses the protections that keep cryptocurrencies safe from theft, disruption, and misuse.
Exploring Options for Storing Cryptocurrency
There are generally two categories of storage and four types of wallets-desktop, mobile, hardware, and web-based:
- Desktop wallet: A program that resides on your computer. Not the safest storage method.
- Mobile: A program that is hosted on a mobile device. Not very secure.
- Hardware: A device similar to a USB drive. Secure, depending on if it is connected and how it connects to another device.
- Web-based: A wallet that is hosted by a web service. Not secure, as you’re letting someone else store your keys for you.
Whether a wallet is connected to or resides on the internet determines whether it is a hot or cold wallet.
Crypto Security Tips
Use FIU-Registered Crypto Exchanges: To stay legally safe in India, it’s mandatory to use FIU-registered crypto exchanges (such as CoinDCX, WazirX). Use the exchange only for trading and transfer long-term funds immediately to your private wallet so your entire portfolio isn’t held on a single centralized server.
Create a dedicated crypto email address: It’s crucial to have a secure email address for your transactions. This email address should never be used on Swiggy, Zomato, or social media. This will keep your crypto account secure even if a data breach occurs.
Avoid P2P scams: Bank account freezes due to P2P trading are on the rise in India. Accepting funds via P2P from unknown individuals could expose your bank account to cybersecurity scrutiny. Therefore, always trade with verified merchants or use direct bank deposit options.
Keep Aadhaar biometrics ‘locked’: Hackers in India use leaked Aadhaar data to perform ‘SIM swaps.’ Therefore, always keep your fingerprint/biometrics locked by visiting the Aadhaar app or the UIDAI website.
Use burner wallets: If you’re minting a new DEX, airdrop, or NFT, never connect your main wallet. Create a ‘burner wallet’ with funds only enough to cover the gas fee.
Use a premium VPN: Always use a ‘No-Log’ VPN to hide your crypto traffic from your Internet Service Provider, especially when using public Wi-Fi.
Don’t flaunt your crypto: Never flaunt how much money you’ve made with crypto or how many bitcoins you own, either online or offline. This puts you at risk, both digitally and physically (kidnapping/robbery).
Conclusion
Privacy and security are both extremely important in the cryptocurrency world. With online scams on the rise, it’s even more crucial for investors to protect their digital identities, banking information, and crypto funds.
