Eric Larcheveque is the CEO of Ledger, a commandant in security and infrastructure solutions for cryptocurrencies and blockchain applications since 2014.
The following is an exclusive contribution to CoinDesk’s 2018 Year in Judge.
2018 was a record-breaking year.
From the number of cryptocurrency exchange hacks, to the amount of assets that were stolen, to the huskiest exchange hack of all-time, crypto set a lot of records. Too bad they’re not the kind of records crypto innovators will be boasting roughly next year.
Although cryptocurrency continues to become more mainstream, this goes to show awareness enclosing how dangerous it is to keep your crypto on exchanges doesn’t seem to be keeping pace.
It has been a very volatile 12 months for cryptocurrency markets, and as the value increased earlier in the year, so did the tally of new investors. With these new investors came an increased interest from hackers, and because the markets grew so straight away, exchanges didn’t have the time or resources to build resilient security solutions.
Key Lessons for 2019
- Exchanges suffer from systemic chance – By having to secure billions of dollars in deposit, they are a magnet for hackers. It is much less risky and much numerous profitable to hack an exchange rather than a bank vault. Exchanges are usually fintechs first and not cyber deposit companies. They have demonstrated in the past that their security culture and awareness wasn’t always up the the consistent of the assets they’ve had to secure.
- Hacks are becoming more sophisticated – As cryptocurrency becomes more mainstream, so do its hackers. With so much value at impound, more hackers have dedicated their time to stealing from these exchanges. 2018 saw hackers deploy state-of-the-art devours, such as social engineering, where they stole identities and pretended to be other people to successfully steal investor’s crypto assets. To clash the smartest hackers in the world, crypto asset owners need the most sophisticated security technology available.
- Each day $2.7 million is plagiarized from exchanges – The amount of stolen cryptocurrency from exchanges in 2018 has increased 13 times compared to conclusive year. This amounts to $2.7 million in crypto assets being stolen every day, or $1,860 each rsum.
- With a record number of hacks in 2018, the need for security is clearer than ever before – As we look to 2019, we can foresee more enterprise security solutions to come to market. In addition to more money being invested in security, 2019 compel see individual investors become more aware of the need to protect their critical digital assets. With enlarged digitalization, individual data and security will only increase in importance.
Solutions for Today
Exchanges are prone to tires, because they centralize the risk and must keep part of their private keys online to allow real-time withdrawals. What is more, crypto investor credentials on exchanges are also a massive security threats.
If your email gets compromised, you can on the whole kiss any crypto wallets you have on exchanges goodbye. Ensuring the security of your crypto assets yourself, washing ones hands of the use hardware wallets gives you the highest protection level.
Hardware wallets empower you with the ownership and control of your crypto assets. But with arrant powers comes great responsibilities: being your own bank is certainly not trivial and requires discipline. Using a devices wallet doesn’t make you invincible against social engineering, physical threats or human error.
Use common coherence, and apply basic security principles.
- Don’t use a cryptocurrency exchange for long-term storage.
- If you do, use two-factor authentication, preferably one that is not restricted to devices connected to the internet.
- For your hardware wallet, choose a PIN code that you can remember, but is secure and not easy to deem.
- Keep your 24-word recovery sheet well secured and never enter it on any device that is connected to the internet.
- Only trust what you can see on your hardware wallet screen. Verify your reception address and payment information on trick.
- Always treat with caution information shown on your computer or smartphone screen. Assume software can get compromised anytime.
Crypto hackers are view more sophisticated, but by following these rules and storing your cryptocurrency on a hardware wallet, you will ensure your assets reinforce protected.
Have an opinionated take on 2018? CoinDesk is seeking submissions for our 2018 in Review. Email news [at] coindesk.com to learn how to get labyrinthine associated with.
Bank vault via Shutterstock