Post by Enter Nations on Feb 1, 2018 18:32:22 GMT
Greed turned to fear in the cryptocurrency markets this week, following what was believed to be the largest theft of cryptocoins ever.
Last Friday, thieves hacked into Coincheck, a cryptocurrency exchange in Japan, and walked away with over $530 million worth of Nem, an alt-coin that saw its price rise 574% to $1.90 in one month from early December to early January. It’s now sitting at under $0.70.
For its part, Coincheck has said it will reimburse nearly every Nem at $0.81 on the dollar.
Still, this speaks to one very big uncertainty when deciding to invest in cryptocurrencies: How do you keep your investment safe?
Granted, “safe” isn’t a word you hear often associated with cryptocurrencies, whose prices have been on a roller-coaster ride lately. Ripple’s XRP coins, for instance, have lost two thirds of their value in less than a month, while, Bitcoin has been cut about in half.
But cryptocurrency investors understand that price volatility is part of the game. What they have a hard time accepting is the real possibility that virtual currency can be stolen.
When it comes to theft, though, there are safer ways to hold your cryptocoins.
Go Cold Storage
If you invest in cryptocurrencies, you’re at risk of having a hacker single you out, seeking details about your life in order to nick your coins. So you must be careful about what you say on social media or other online venues.
But if you’re only looking to use the cryptocoins for investment purposes — and not as an actual currency to make transactions with — then consider taking your coins offline altogether.
Yes, that is possible.
The process is called “cold storage” (“hot” storage, by contrast, refers to keeping your coins online).
If you’re not holding a significant amount of funds, then you can consider a cold option called a “paper wallet,” which you can download online from places like Bitcoin.com or MyEtherWallet.com and set up within a few minutes.
The idea is to create a record of your private key for your Bitcoin (often as a QR code) and to have that information in printed form — not stored on your computer — so it’s totally inaccessible to hackers.
Of course, the downside is that you now have to secure the hard copy of your code in a place that can’t be accessed by anyone — but that’s convenient enough for you to access if you need to spend or sell the currency. (And remember, if you lose the contents of your paper wallet, it’s like losing your real wallet — you’re out of luck.)
For some, that might mean a safe deposit box, which is a bit ironic in that you are storing a virtual currency in an actual lock box.
But that’s the price you may have to pay for peace of mind.
If your investments continue to grow, you may want to turn to a “hardware wallet” instead, which stores the codes for the coins on a device (often a USB thumb drive-like device) that’s detached from a computer so hackers can’t get at it. You would only hook it up to a computer when you want to sell.
This provides extra security if you go online to unload your investment. But here too, it’s incumbent on you to physically secure your hardware wallet so that it does not fall into the wrong hands.
Source: TIME
Last Friday, thieves hacked into Coincheck, a cryptocurrency exchange in Japan, and walked away with over $530 million worth of Nem, an alt-coin that saw its price rise 574% to $1.90 in one month from early December to early January. It’s now sitting at under $0.70.
For its part, Coincheck has said it will reimburse nearly every Nem at $0.81 on the dollar.
Still, this speaks to one very big uncertainty when deciding to invest in cryptocurrencies: How do you keep your investment safe?
Granted, “safe” isn’t a word you hear often associated with cryptocurrencies, whose prices have been on a roller-coaster ride lately. Ripple’s XRP coins, for instance, have lost two thirds of their value in less than a month, while, Bitcoin has been cut about in half.
But cryptocurrency investors understand that price volatility is part of the game. What they have a hard time accepting is the real possibility that virtual currency can be stolen.
When it comes to theft, though, there are safer ways to hold your cryptocoins.
Go Cold Storage
If you invest in cryptocurrencies, you’re at risk of having a hacker single you out, seeking details about your life in order to nick your coins. So you must be careful about what you say on social media or other online venues.
But if you’re only looking to use the cryptocoins for investment purposes — and not as an actual currency to make transactions with — then consider taking your coins offline altogether.
Yes, that is possible.
The process is called “cold storage” (“hot” storage, by contrast, refers to keeping your coins online).
If you’re not holding a significant amount of funds, then you can consider a cold option called a “paper wallet,” which you can download online from places like Bitcoin.com or MyEtherWallet.com and set up within a few minutes.
The idea is to create a record of your private key for your Bitcoin (often as a QR code) and to have that information in printed form — not stored on your computer — so it’s totally inaccessible to hackers.
Of course, the downside is that you now have to secure the hard copy of your code in a place that can’t be accessed by anyone — but that’s convenient enough for you to access if you need to spend or sell the currency. (And remember, if you lose the contents of your paper wallet, it’s like losing your real wallet — you’re out of luck.)
For some, that might mean a safe deposit box, which is a bit ironic in that you are storing a virtual currency in an actual lock box.
But that’s the price you may have to pay for peace of mind.
If your investments continue to grow, you may want to turn to a “hardware wallet” instead, which stores the codes for the coins on a device (often a USB thumb drive-like device) that’s detached from a computer so hackers can’t get at it. You would only hook it up to a computer when you want to sell.
This provides extra security if you go online to unload your investment. But here too, it’s incumbent on you to physically secure your hardware wallet so that it does not fall into the wrong hands.
Source: TIME
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