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Securing the Future: Cryptocurrency Security

By Chase Smith, System Administrator at Iconic IT

In 2008 an idea was springing forth which would change the course of history. Bitcoin was in its infancy yet quickly establishing a foothold, preparing to forge a new path for the realm of technology and finance. For over a decade, cryptocurrency projects have been working towards creating a decentralized space in which to conduct financial operations and utilize blockchain technology in myriad applications. If we have learned anything since crypto’s inception, it is that with great advancements come even greater checks and balances because at the heart of the blockchain revolution sits a diabolical enemy – cybercriminals.

The Keys to Cryptocurrency Security

Decentralized technologies pave the way for a new paradigm in attack vectors, as has been seen with countless ransomware attacks, wallet hijackings, and coordinated hacks which have left many penniless.  Companies, institutions, and investors have been the primary targets of cybercriminals as they attempt to empty the wallets of their unsuspecting victims. Yet the biggest question looming over our heads is how can we thwart cybercriminals? How can we best protect our business and assets? What are the best practices for cryptocurrency cybersecurity? The answer comes in a popular adage among crypto enthusiasts: “Not your keys, not your funds!”

What exactly does this mean? It means that if you do not own the private keys to the wallet you are transacting on, you do not technically own the funds that were deposited to it. Popular cryptocurrency exchanges like Coinbase and Binance own their users’ wallets; if the exchange gets hacked, which we have seen time and time again with the likes of Mt. Gox, BTC-E, and the more recently Cryptopia hacks, then users lose access to their funds. How does one work around this underlying insecurity native to centralized exchanges? The goal is to own the private key to your funds, which ideally means using cold storage or mobile app solutions. Methods of cold storage include hardware wallets like Trezor or Ledger devices. Other solutions include paper wallets and even mobile apps which allow you to take possession of your funds without involvement from a controlling third-party. After all, the purpose of cryptocurrencies is to put the power of your money in your hands. We now have the power to be our own bank, with no intermediaries, outlandish banking fees or overwatch from the powers that be.

Cryptocurrency Security Solutions for Businesses

Businesses also have a plethora of commercial-grade options available when it comes to storing their crypto assets or transacting on the blockchain. Larger companies typically use custodies such as that offered by Coinbase and Gemini, which are independent storage and security systems that provide some of the most advanced cold storage you can buy. You can also set up multi-signature wallets that allow the funds to be secured by more than one person, similarly to the dual-control setup in banking. Crypto is not short of choices when it comes to ensuring your assets are incapable of being compromised. However, there are programmers creating applications like BitCrack which will scan the private key space and be able to spend the funds from your account once they crack it. Anyone who can install a program and enter a few parameters would be capable of deploying this hijacking technique. Once they own the key, they own the funds. Luckily the private key space is 2^192, which is an astronomically huge number, and what it means for you is that the likelihood of your unique private key being cracked is nearly impossible. Albeit, cybercriminals armed with enough computing power and the proper mathematical magic tricks can still cut the chances to a very small margin, threatening anyone with a wallet, even businesses.

Cryptocurrency security best practices come in many forms. There are offline paper wallet generation techniques that are completely air-gapped and unable to be compromised unless someone physically steals your private key. We already discussed hardware wallets that use advanced encryption and specialized chips called Secure Elements that are protected against many different attacks. Combined with a custom OS, physical access requirements, and a personalized security code, the Ledger makes a great option at a good price for those wanting to store their funds securely. Custodies, paper wallets, desktop wallets, and even backing up to a flash drive are other viable solutions.

Secure Your Business’ Future Today

Cryptocurrency can be thought of as the next evolution in the payment cycle. Reach back to Babylon when gold bullion was the staple of currency, then leap forward to paper money and eventually to debit cards. It is clear that Bitcoin is a solution for the next rung in the ladder. Digital currencies are here to stay, in fact they are breaching the forefront of how we transact on a daily basis. The biggest hurdle we face is protecting ourselves in this new era, an era driven on the principles of freedom – the freedom to transact with one another without being chained to the banking overlords.  Prepared with the right knowledge and cryptocurrency security in place we can dive into the foray without fear of being a victim of relentless cybercriminals.

Learn more about how the experts at Iconic IT are prepared to help protect your cryptocurrency assets, request a FREE cybersecurity consultation today – OR – get started with our DIY Comprehensive Cybersecurity Assessment Checklist.

Do-It-Youself Cybersecurity Checklist

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