Cryptocurrencies such as Bitcoin have been in the news a lot lately due to significant rises in the value of a number of different cryptocurrencies.  However, they were also newsworthy due to a prominent story last month about a Bitcoin owner, Stefan Thomas who had lost the password  he needed to gain access to a portable hard drive containing the private keys to his digital wallet containing Bitcoin valued at 220 million dollars.  With most of your accounts, if you can’t remember your password, you can reset your password by answering a security question, but Bitcoin does not store your passwords.  Bitcoin’s algorithms enable you to create an address and set up a private key in a manner that is not known by anyone else thereby enabling the Bitcoin network to confirm the accuracy of your password and enable transactions without actually seeing or confirming the password.  The portable hard drive used by Thomas only gives someone ten attempts to enter a successful password before encrypting the contents forever.  Thomas has made eight unsuccessful attempts to access his account and is now stopping his attempts out of a fear of losing his funds forever if he makes two more unsuccessful attempts.  The Cryptocurrency data firm Chainalysis estimates that presently there is about 140 billion dollars of Bitcoins that are similarly inaccessible.

Over the years I have written about a wide variety of cryptocurrency scams, many of which are related to attempts by scammers to steal cryptocurrencies from both the large cryptocurrency exchanges, but more often from the particular cryptocurrency wallets of individual holders of cryptocurrencies.

If you do decide to invest in cryptocurrencies, how can you secure your wallet in the best and most convenient manner?

TIPS

Your digital wallet is where the key that allows you to access your cryptocurrency account is found.  If your key falls into the hands of a hacker, you can easily lose all of your cryptocurrency account so it is of paramount importance to secure your digital wallet.  Ditigal wallets can either be hot wallets or cold wallets.  Hot wallets are connected to the Internet which makes them more susceptible to being hacked which is why a cold wallet which is not connected to the Internet, but rather is is kept in a portable hard drive is your best bet.

When doing cryptocurrency transactions online, use a Virtual Private Network (VPN) to provide encryption for your communications which will make the transactions more secure and refrain from using public WIFI for cryptocurrency transactions.  Use a strong, complex password for your account and consider using a password manager or store your password on a portable hard drive that you keep in a secure spot.  Finally, use dual factor authentication for your account for additional security, however, it is important to note that many cryptocurrency thefts have occurred when hackers were able to defeat dual factor authentication through SIM swapping whereby they contact the cell phone service provider of their victim, answer a security question and manage to get the cell phone service provider to switch the phone number of the victim to a phone controlled by the criminal thus defeating the dual factor authentication.

The best thing you can do to  protect your SIM card from being swpped is to set up a PIN or password to be used for access to your mobile service provider account. This will help prevent a criminal from calling your carrier posing as you and convincing your mobile carrier to swap your SIM card to the criminal’s phone merely by providing personal identifying information or answering a security question.

AT&T will allow you to set up a passcode for your account that is different from the password that you use to log into your account online.   Without this passcode, AT&T will not swap your SIM card.   Here is a link with instructions as to how to set up the passcode. https://www.att.com/esupport/article.html#!/wireless/KM1051397?gsi=9bi24i

Verizon enables customers to set up a PIN or password to be used for purposes of authentication when they contact a call center.  Here is a link with information and instructions for setting up a PIN with Verizon.  https://www.verizonwireless.com/support/account-pin-faqs/

T-Mobile will allow you to set up a passcode that is different from the one you use to access your account online.  This new passcode is used when changes to your account are attempted to be made such as swapping a SIM card.  This code will not only protect you from criminals attempting to call T-Mobile and swap your SIM card, but will also prevent someone with a fake ID from making changes to your account at a T-Mobile store.  Here is a link to information and instructions for adding a new passcode to your account. https://www.t-mobile.com/customers/secure

Sprint customers can establish a PIN that must be provided when doing a SIM swap, in addition to merely answering a security question, the answer to which may be able to be learned by a clever identity thief.  Here is a link to information about adding a PIN to your Sprint account. https://www.sprint.com/en/support/solutions/account-and-billing/update-your-pin-and-security-questions-on-sprint-com.html

Finally, I strongly urge anyone considering investing in cryptocurrencies as well as any investment to research the investment thoroughly before investing.  No one should ever invest in anything they do not fully understand.

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