Advanced Security Techniques

Introduction 

In the world of cryptocurrencies, advanced security techniques are crucial, particularly if you manage significant assets or regularly use DeFi platforms. While basic measures like using MFA and strong passwords are important, they may not be enough for high-value holdings. This guide covers the advanced techniques you can use to ensure maximum security for your cryptoassets, reducing the risk of becoming a target for hackers. 

Best Security Practices 

Cold Storage and Hardware Wallets 

For securing large amounts of cryptocurrency, cold storage and hardware wallets are among the safest options. Cold storage means keeping your private keys offline, using tools like hardware wallets or even written-down seed phrases. This makes them inaccessible through the internet, significantly reducing the risk of hacking. Hardware wallets like Ledger and Trezor are small physical devices that store your private keys while still allowing transactions when plugged into a trusted device. 

Multi-Signature (Multi-Sig) Wallets 

Multi-signature wallets require multiple authorisations before a transaction can be completed. This means that instead of using just one private key, you need multiple keys to approve any action, making it harder for hackers to steal your funds. Multi-sig wallets are especially useful for shared funds, such as in business settings where multiple stakeholders need to approve withdrawals. 

Multi-Factor Authentication (MFA) and Security Keys 

Multi-Factor Authentication (MFA) adds an extra layer of security to your account, making it significantly more secure than relying on just a password. By requiring additional verification, such as a code from an authenticator app, MFA helps protect against unauthorised access.  

Popular apps for MFA include Google Authenticator, Microsoft Authenticator, Authy and LastPass Authenticator, all of which generate time-sensitive, unique codes that only the account owner can use, further increasing security. There are more apps available.  

Physical security keys also provide a particularly effective method. Tools like YubiKey are hardware devices that act as a second factor, ensuring that access to your accounts requires physical confirmation. Unlike SMS-based MFA, which can be vulnerable to SIM swapping, using a physical security key ensures an added level of protection. 

Whitelisting Withdrawal Addresses 

Most exchanges and wallets offer an address-whitelisting feature, allowing you to specify trusted addresses to which funds can be sent. This means that even if someone gains access to your account, they cannot transfer funds to an unapproved address. It’s a simple but effective way to add another line of defence. 

Learn to Spot Phishing Attacks 

Phishing attacks are common in the crypto world and often involve creating fake websites or sending messages pretending to be a legitimate exchange or wallet provider. Always verify website URLs and avoid clicking on links from unsolicited messages. Bookmarking the correct URLs for exchanges and wallets can help avoid falling for phishing attempts, as these attacks often rely on minor variations in web addresses that can trick unsuspecting users. 

If you are using decentralised apps (dApps), using a cold wallet is highly recommended. There are significant risks when using dApps because once money is sent, it’s very unlikely you can get your crypto back. Common attack-vectors include: 

• Fake profiles replying to the posts of genuine company accounts on X. These have very similar handles, verification badges and similar URLs – majority of them have botted likes and retweets to attempt to seem genuine. 

• When you make a transaction, a fake profile that has a very similar wallet address to you will send you fake crypto, in hopes that you just copy-paste the address (thinking it's yours) and send money to it. 

• Fake websites that have a “connect wallet” button, which when actioned will be a malicious attempt to steal your crypto. 

The world of crypto phishing is ever evolving and getting harder to spot as time goes by, so as a rule of thumb, never connect your wallet to random websites.  

Custody Solutions for Large Holdings 

For individuals or institutions managing significant cryptoassets, professional custody solutions are a safer option. Services like Archax Custody offer institutional-grade storage solutions that offer enhanced security and protection measures. These custodial services are particularly useful for those who want peace of mind with high-value investments, allowing them to avoid the risks associated with managing their own private keys. 

Regular Security Audits and Seed Phrase Management 

Performing regular security audits helps you ensure that your devices, software and accounts are secure. Always update your wallet software, change passwords periodically and check for potential vulnerabilities. For seed phrase management, avoid storing your seed phrases digitally, where they could be compromised. Instead, write them down on paper or engrave them onto a metal plate to ensure that they are protected against both digital and physical threats. 

To Sum It Up 

Security in crypto should always be a top priority. The world of phishing scams is getting advanced as time goes on, and malicious actors are making it harder to spot them. Always use a combination of Multifactor Authentication, whitelisting addresses and consider custody services that add extra security for your assets. Don’t forget to regularly audit your security setups throughout the year to ensure it’s all up to date.