10 Cryptocurrency Security Tips How to Keep Your Cryptocurrency Safe

  • George Shnurenko
    📚 WikiCoin

    Crypto adoption has led to an increase in theft of digital assets. These security tips show you how to be safe

10 Cryptocurrency Security Tips How to Keep Your Cryptocurrency Safe
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The widespread acceptance of cryptocurrency as a standard means of exchange is increasing daily. This was confirmed when Coinbase and, two renowned cryptocurrency exchanges, reported about two mln and 1.8 mln new users respectively within 60 days. While cryptocurrency enthusiasts might rejoice at this revelation, the question of “how to keep your cryptocurrency safe” is fast becoming a cause for concern.

The extent of cryptocurrency security threats

According to several reports on cryptocurrency security, about nine mln dollars is lost daily to scams. A more recent report showed that a 12.75 mln dollars investment in cryptocurrency by Australians was a scam. These developments put the magnitude of fraud to be about four times worse than it was last year and it shows no sign of slowing down, hence, the need for an effective cryptocurrency security guide.

Financial analysts are propounding theories, albeit unfounded, of how cryptocurrency would not weather the storm. However, techniques abound on how to keep your cryptocurrency safe. This article explains the various cryptocurrency security tips which will ensure your digital assets are safe.

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What are the popular cryptocurrency security risks?

Many new investors might find some of these terms puzzling, however, in a short while, it’ll become mundane lingo. What are the security risks you might face?

  1. Phone-porting attack- This is a phenomenon whereby criminals join social media discussions for crypto-users and then monitor the emails and phone numbers being revealed. When they get this information, they use social engineering techniques to gain ownership of the phone number or email address, log in to the user’s account or wallet and then empty it.

  2. Phishing attacks- They should be easy to detect for a trained eye and it isn’t really a preferred method of cryptocurrency theft, however, when it comes to cryptocurrency security tips, every threat is considered important. Here, the perpetrators pose as reputable financial companies to trick unsuspecting users into giving up their digital wallet login details.

  3. Ponzi schemes- Human wants are inherently insatiable and these criminals leverage this knowledge to trick users into losing huge sums of money. Most times, the victims of Ponzi schemes disregard every cryptocurrency security guide and choose to fall prey.

Amidst these stern-looking and dangerous-sounding cryptocurrency security threats, how to keep your cryptocurrency safe becomes a prevalent issue which can only be resolved using a combination of skill, fastidiousness and experience.

10 Cryptocurrency security tips

Cryptocurrencies are underpinned by a decentralized technology. This conveniently eliminates the unscrupulous middle-men, banks, or any form of centralized agency which can easily be attacked. However, the bulk of securing your digital assets rests on your shoulder.

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Here are 10 cryptocurrency tips you should abide by if you don’t want to be a victim.

  1. Backups are important- Having a backup is the ultimate way of saying “I know that anything can happen, I won’t allow that cause me loss.” The pain you feel when you work on a project and then your laptop gets stolen before you can submit it is incomparable to what you experience when you lose $5,000 in cryptocurrency. The ultimate cryptocurrency security guide is to have a backup, simple.

  2. Encrypt your sensitive data- Linux users, perhaps, already know this tip and they have been enjoying it or years now. On Windows and Mac though, it’s not so easy to implement. Tools like VeraCrypt and FileCrypt aid in encrypting your drives and wallet, saving you from any loss.

  3. Use a core wallet- These are designed or cold storage and are touted for their stability and flexibility. Although for daily transactions, they are not preferred due to the slow, clunky and rigorous mode of operation. This, in itself, is an advantage as it will make theft incredibly hard to perpetrate.

  4. Only use secure networks- These crypto-robbers are smart. Their intelligence, coupled with high-speed computing facilities renders even those who come up with cryptocurrency security tips helpless. You are making their job easier for them when you use multiple networks for surfing or public Wi-Fi.

  5. Go the extra mile with passwords- “Password1234” and “myPassword” used to be really cool when signing up on Twitter, Facebook and other social media platforms. However, when your money is involved, you need to ditch creativity and be more security conscious.

  6. Abstain from mobile wallets- This is one of the cryptocurrency security tips that people have to learn on their own- after unfortunate experiences. It is incredibly easy to lose access to your phone, get ambushed or even get hacked and you’ll be forced to relinquish the little funds you have in the wallet.

  7. Third-party cryptocurrency security is recommended- There are few companies out there leading the campaign of cryptocurrency security and they provide hardware wallets for you to store your assets. They are also equipped with multilayer security and double authentication systems.
    This begs the question of how security is guaranteed using anything third-party. You also need to play it safe, watch out for phony companies who are out to steal your information.

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  8. You need strong protective doors, not breakable windows- Pardon the pun but this is an important cryptocurrency security guide to adhere to. Windows offers beautiful GUIs, simple installation process, and ubiquity. However, the vulnerability is just too great to ignore. For people who have significant investments in digital assets, their cryptocurrency security tip will be to install Linux.

  9. Be discreet with your personal information- Why should you go about broadcasting the amount you have in your wallet or other sensitive details about your account? Why?

  10. As much as you can, do not divulge any piece of information which can be used to access your personal information- pins, phone numbers, email addresses, passwords, etc. Even if the hackers are going to attempt phishing, make their job extremely hard to execute.
    Avoid suspicious transactions- Ponzi schemes, ransomware and other security threats are not things to joke about. If you do not have a good feeling about that transaction, do not be afraid to pull the plug. The worst that can happen is that you miss out on the “juicy offer” being advertised, at least you have your hard-earned cryptocurrency safe.

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The ultimate cryptocurrency security guide

Even though you had fun reading this article, the most important step you can take to keep your coins safe is to follow these tips religiously. It is very easy to forget some of these and the consequence is disastrous. When you make up your mind to follow these suggestions, you can relax, knowing fully well that you’re immune to their ploys. 

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SegWit Explained: What Is Bitcoin's Segregated Witness?

SegWit Explained: What Is Bitcoin's Segregated Witness?
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Segregated Witness (SegWit) is an implemented protocol update that solves the problem of the Bitcoin’s blockchain transaction malleability. The point is in one of the transaction components. The first part is the Basic information (the sender, the amount, the recipient). And the second part — Witness — carries a special cryptographic signature (code). This code is a confirmation of the virtual transaction in Bitcoin currency.

Witness’ signature creates difficulties for the blockchain because the form can be changed after the appearance in the block. Bitcoin will still reach the addressee, but the construction of new transactions will be complicated because they all go along the chain. Unconfirmed transactions slow down the speed of new ones, reducing the overall Bitcoin network performance due to pulling data from a past virtual transaction.

The current Bitcoin protocol makes it difficult to implement large-scale updates, as well as to conduct fast transfers. The problematic network feature is called the “transaction malleability”. Against this background began the movement for the introduction of SegWit.

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The goals of SegWit

Segregated Witness must restore the Bitcoin network and adapt the blockchain technology to new realities. The main task is to solve transaction malleability and scalability. SegWit optimizes the transaction process and creates conditions for the subsequent increase in virtual block size. SegWit has to solve such problems and questions:

  • If Witness signature is segregated from a block of Bitcoin increases size and bandwidth of the entire network.

  • The transaction size is reduced by 2 times.

  • Reducing the blockchain size, which saves disk virtual space for nodes.

  • Starting and synchronization of nodes speed up significantly.

  • The enhanced spam protection mechanism of Bitcoin currency.

It follows that SegWit addresses the most important aspects for Bitcoin: scalability, protection level, transactions speed, and interaction with new protocols.

The story of Segregated Witness

The first talk about the need to modernize Bitcoin’s protocol and about possible ways to solve the transaction malleability problem appeared in 2012. Bitcoin-Core developers Russell O’Connor, Luke Dashir, Gregory Maxwell and others became initiators. Active actions for the currency began in the summer of 2014, when Maxwell, Pieter Wuille and cryptographer Adam Back launched the blockchain research company called Blockstream. In this environment, they found a solution to Bitcoin’s problem. It was decided to separate special cryptographic signature from the main part of the transaction. They called this function Segregated Witness.

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In parallel with Segregated Witness, the idea of ​​optimizing Bitcoin’s blockchain by increasing the block size (the default is 1 megabyte) appeared. It could be realized only through a hard fork — a rigid network separation through the introduction of changes incompatible with the current protocol. SegWit, on the contrary, was a soft fork or partial update of Bitcoin’s protocol. To implement it, the Witness’s signature must be segregated in a new part of the virtual block. And its anchor (Merkle Root) recorded in the transaction of miners’ fees. As a result, more space remained in Bitcoin’s block, and its size increased without actually increasing. This result allowed us to solve the problem of the Bitcoin network scalability, which was also quite acute.

After the appearance of the second idea, a real war broke out, including among the developers of Bitcoin currency. Miners and pools couldn’t come to a consensus from 2015 to August 2017. As a result, SegWit was accepted and activated. A special code called BIP91, developed by Bitmain engineer James Hilliard, turned out to be the best compromise among all the proposals received over several years.
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The main advantages of Segregated Witness

The list of benefits which will be received by the Bitcoin network with the introduction of SegWit is very large, we focus the main ones:

  1. The third party will lose any options of signature’s changing, which will facilitate the development of new smart contracts.

  2. Dividing special cryptographic signature from Basic data will significantly increase transaction size and Bitcoin’s blockchain bandwidth, and the average virtual block size will be 1.7-2 MB.

  3. With Segregated protocol, transactions in Bitcoin currency will remain available to participants who have accepted SegWit, and those who refuse to do so. At the same time, users with an updated protocol will work with smaller commissions.

  4. The adoption of SegWit greatly simplifies the implementation of new soft forks, allowing to introduce new ideas to improve the security of Bitcoin currency.

  5. The block validation rate and transaction security will increase due to a change in the signature hash function from linear to exponential.

  6. A segregated signature will reduce the currency’s charging fees.

  7. SegWit will have a positive impact on the Bitcoin ecosystem here and now, as well as create a springboard for further development.

Arguments against SegWit

Even today, Segregated Witness is not fully accepted by the Bitcoin network. Sceptics believe that this will take years because the number of nodes has already exceeded 10,000. An increase in the number of participants and a virtual transaction will result in a Bitcoin’s block size of 2 MB is small for the needs of the ecosystem.

Partial centralization of Bitcoin’s system due to the implementation of the SegWit protocol will increase the number of unconfirmed transactions, which will strip the network and make currency vulnerable to hacker attacks.

Some Bitcoin developers and pools believe the adoption of SegWit is dictated by the economic gain of Blockstream, which owns the Lightning Network protocol. Its technical implementation in the Bitcoin network without Segregated Witness is almost impossible.

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Will the time come for SegWit2x?

Speaking about the implementation of Segregated Witness and Bitcoin currency, it is impossible not to mention the postponed indefinitely SegWit2x. The agreement was the result of heated discussions and a search for consensus. It was decided to make a hard fork, after which the block size should increase to 2 megabytes. The split was scheduled for mid-November 2017. In fact, Bitcoin would split into two networks with its own coin, rules, signatures and standards.

However, the idea was not destined to come true. Firstly, the negative attitude of the developer community and the launched NO2X campaign did not play into the hands of the “Segregated” protocol. Secondly, BIP91 was implemented earlier and it was successful.

As a result, on November 8, 2017, the complete closure of the project was announced. But there were people who positively evaluated the results for Bitcoin. For example, the head of, Peter Smith, who initially supported the Segwit2x idea, spoke as follows:

“We’re relieved. The goal of the NYA was to bring the community together and keep the majority of the users on the same chain for at least a little while longer.”

SegWit usage metrics
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Results for Bitcoin and blockchain

From the moment of implementation of Segregated Witness, a year and a half has passed, but the protocol is not accepted by 70%. Many large services have not yet implemented it into their processes. However, positive changes are already visible, especially for ordinary users. Now the average transaction cost with confirmation within 20 minutes, according to Bitcoin Core Fees, is estimated at 5 satoshi/byte, that is, about $ 0.08 for the entire virtual transaction.

Spam attacks on the Bitcoin network have also stopped, the mempool remains free, and the average block size has exceeded 1 MB. In addition, the activation of SegWit has opened the doors to the implementation of new solutions and prospects for Bitcoin and cryptocurrency in general.

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