How To Not Lose Your Cryptocurrency Funds on the Blockchain

With the crypto revolution popularity growing and expanding daily, the amount of hacks, scammers, and cybercriminal activity, seeking to steal any cryptocurrency in any way possible grows with it. These attacks come from phishing attacks, finding vulnerabilities in the source code, or impersonating prominent people in popular companies to gain trust in order to obtain confidential user information such as private keys, passwords, seed phrases, etc. These threats are real and are growing daily so please take extreme caution and beware of everyone.

DO NOT GIVE YOUR PRIVATE  INFORMATION TO ANYONE!!!

Yes, hacks are rare and the blockchain is much safer than fiat despite the FUD you hear otherwise. With the blockchain, every transaction is put on a public ledger unlike fiat (dollars) and therefore better trackable however, the threats are real and the most common ways to steal cryptocurrencies are phishing and fraud. Many times, users are the ones that unintentionally provide their private information, not suspecting the fraud and lose their funds due to user error. Here are a few ways to protect your assets and sniff out the fraudsters before you get attacked.

1. Setting up and Securing a crypto wallet

Start out by setting up cryptocurrency wallet — this is your personal safe, which you and only you can access unless you share your private data. In saying this, the SOLE responsibility and security of your of funds rests completely with you: Non-custodial wallets, like Exodus or Metamask, store private keys only on the user’s device, and neither the developers nor the company will help restore access if you lose your private keys and seed phrase. It is strongly suggested to store your private keys and seed phrases OFF LINE and it is also encouraged to have an additional copy in case one copy is lost or destroyed. We can’t emphasize this enough as this is the ONLY way to access your wallet.

Note: Different wallets may have different processes for setting up and not all wallets are available in certain locations. Do your own research to choose the best one for you (DYOR). Many wallets will require you to immediately save your seed phrase and request or require additional security measures like 2FA. Despite being an additional step to access your account, this extra step secures your account from scammers and bots. This step is strongly encouraged: 2FA (Two-factor authentication), applies the additional steps of entering a PIN, authentication number (Google/text/email) or password for additional security.

The normal means of setting up a wallet is:

• Download and setting up a new wallet;
• Storing, saving, and confirming your seed phrase;
• Setting up and confirming your password and/or PIN to gain access to your wallet. This insures the wallet file stays encrypted and can only be decoded after inputting the additional security step. I.e.: password/PIN. If the information is lost, a complete restoring of the wallet will be required, using a recovery phrase, to access your wallet. Please note, lost information does not remove the assets. Your assets are still there, you just have to regain access to the wallet to make transactions.

This completes the setting up of your new crypto wallet and it is now ready to go. The next step is to effectively secure and protect your wallet by all means available. It is again strongly suggested to create a backup copy of the wallet data. Password, seed phrase, pin, etc.

What are seed phrases?

A seed phrase is a sequence of 12, 15, or 24 pseudo-random words generated by the wallet. These are sometimes also called a recovery phrase, a secret phrase, a mnemonic password, or simply a seed. Some wallets offer other sequences and some wallets permit you to customize the sequence for added security. The seed phrase is and stores the information necessary to restore the wallet in case you lose or forgot your password or otherwise lost access to your wallet.

Some more secure wallet options off line devices such as hardware wallet Ledger and Trezor. Some of these allow you to add a mnemonic password with a passphrase. This is yet another (extra) customized word that is created by the user and is an additional layer of security for your assets in the wallet. This extra layer allows you to set up an unlimited number of non-disclosed/hidden addresses to store cryptocurrencies with layers of security. This set up is chosen by many that desire to hold (HODL) coins long term.

The most important thing to remember is IF YOUR SEED PHRASE IS LOST, COMPRIMISED, OR STOLEN, YOUR FUNDS WILL MOST LIKELY BE STOLEN AND LOST FOREVER. A mnemonic password grants access to the funds in any wallet and on any device. Note: Exactly why how you store your recovery phrase is EXTREMELY important.

2. Storing Your Seed-phrase and Private Data

Storing the mnemonic password in digital form, for example, like a screenshot or text on a device or in the cloud is NOT ENCOURAGED. The same goes for flash drives or any other online storage programs. Scammers and hackers can intercept traffic, gain access to your device or account. The most secure way to store funds is offline. Hand written typed or printed will work:

• Written, typed, or printed on paper;
• Any form of card (laminated);
• Offline digital device specifically designed for storing seeds.

Another rule is: Never give a seed phrase to anyone! Regardless of how fervently you are requested to. Scammers and fraudsters introduce themselves as technical support employees or other trusted manners to manipulate for access to funds. One example is; scammers manipulate using fear such as “you have been hacked, and you need to immediately restore the wallet by entering a secret phrase on their FAKE site using the link they conveniently provided. Of course, this is fake, and your funds will be irretrievably lost. Another example is someone posts a question on social media site and the scammers private message you offering help, all while acting like they are an Administrator of the site you posted your question on. Unwittingly, people fall for this all the time as they believe the scammers are admins and either send $ or give private data to resolve the question. DO NOT FALL FOR THESE. Finally, one of the oldest is the “Send X amount of coins to this address and you will receive X amount back” Usually much more than what you send. These are all scams. DO NOT FALL FOR THEM. In short, do not share any of your private data and store the same in an offline and secure manner to protect and secure your assets.

Here are a few examples of online scams to be cautious of:

ALWAYS double check the site you are visiting to validate you are on the actual site and not a fake site acting as the original site. One example below shows the domain is different from the actual Trezor.io. site and is actually io-restoretrezor.com. This is a sure way to know you are on a phishing site and not the original. If you connect a wallet to it and enter private information, your funds will be stolen immediately. Another important rule follows from this:

Always double check the domain on which you use or download the wallet.

It is best to find the actual site then save in your bookmarks to be sure you only use the actual link. Another thing to note is always beware of advertising links in Google Ads. Many times, fake sites and scams are found there.

This also applies to cellphone apps like Android apps. Google Play is not very securely moderated than iPhone’s App Store, so scammers can and do publish fake apps. The attackers manage to publish the application on behalf of the manufacturer. ONLY download apps from official sites.

Note: Avoid losing funds by using fake wallets. These fake wallets act as a sapper. This do save the bulk of your funds however, the best option is to be extremely careful and never enter personal information on any sites.

Additional tips for storing your seed:

• Store your secret phrase in a safe place that only you know about: a safe or a safe deposit box. This is one of the safest way;
• Make several copies in case one gets damaged or lost;
• Never use your seed phrase in public: the office, waiting room or cafe;
• Never keep screenshots for recording a mnemonic password and never copy on clipboard;
• Never create with other eyes nearby;

If you believe your wallet may be compromised, immediately transfer the money to a backup wallet. If you do not have a plan B wallet, create one.

Nobody should have your mnemonic password or other private data but you! As a last resort, you can pass it on to close people you trust.

Additional security can be applied if available. Please consider applying these security measures: Set a PIN, password, Touch ID or Face ID, or setting up two-factor authentication. It is suggested to use an app like Google Authenticator instead of a phone number or email. This makes it most difficult for scammers and attackers to gain access, even if they manage to access your device.

Public and private keys

When you create a crypto wallet, it will display a long sequence of numbers and letters. This number is called the account’s public key. It solely encrypts the address of your wallet, in order for other users or you yourself can send coins to. It can be given, disclosed, and transferred to strangers because this address does not contain your confidential information nor provides access to your funds. Here is an example of a public key for bitcoin:

17TVw1h4LuhqbLMV73GVsv3DkzHVTU2Ag9

Note: some wallets permit the creation and use of numerous addresses. It is best to generate a new address for each transaction if you are extremely cautious and favor utmost privacy. This helps keep the trail most private and makes it very difficult to track the transaction.

The private key is hidden, so only you can get it. Private keys allow you to spend cryptocurrency, so NEVER share or give your private keys to anyone.

Some confuse the private key with the mnemonic password. The private key looks like a public key, but most often holders use a seed phrase and open wallets using a PIN, password, Touch ID, or Face ID (when using mobile wallets). In fact, public and private keys differ only in length and only slightly in format. Bitcoin legacy (original) addresses start with the number “1”, and private keys with the letter “L”. An example of a private key for bitcoin:

L4FyYRU6pRj4xoFw6pJhRAcDxdrdvoZzhB7ftFaLypnUBpa3Ko2U

Conclusion

Be extra cautious and careful and NEVER trust anyone. If someone writes to you in private messages with a request to provide them with any private data or seed phrase, ignore, block and report them. Only scammers do this. Support will never write to you directly. If you need any help, write only to the general chat. Admins and moderators will come to your aid. The more of us that report them, the safer we all are.

NEVER GIVE YOUR SEED PHRASE, PRIVATE KEY, AND PASSWORDS TO ANYONE!!!

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