How to avoid theft? Tips from CZ, the founder of Binance
There is no doubt that security in the cryptocurrency market is something essential and necessary. Unlike your traditional money that exists in your wallet or bank account, where there are many controls and regulations providing you with significant protection, and even if you are robbed, there is a possibility of compensation, the situation is completely different in the cryptocurrency market. You are the main controller of your investments, and the responsibility for keeping them safe and avoiding theft and hacking lies personally on you. Therefore, you must learn how to protect your assets before learning how to trade.
There are many tips and opinions on how to keep your investments secure, but when CZ, the founder of Binance, shared his advice, I found it contained valuable information for any trader in the market. Therefore, in this article, I will summarize some of these tips based on my reading of his ideas in his recent article.
Security in the cryptocurrency market
CZ explains the security measures and available tools in detail, but some may find them somewhat complex, so I will simplify it by categorizing security strategies according to the size of the investor:
Small investor
Medium investor
High net worth investor
Small investor
A small investor is someone who has investments of less than $10,000. For this type of investor, the available security means are in line with their uses, and they often involve keeping assets either on a trading platform or in a digital wallet on their phone.
Keeping assets on a trading platform
If you are going to keep your assets on a trading platform, choosing the platform is the first step. The platform should be reliable and have a good track record in the market. Some platforms also follow strict transparency procedures that enable you to know whether they hold user assets at a 100% rate or not.
After choosing the platform, the second step is to secure your account as much as possible:
Use a separate email address specifically for your account on the platform, and do not use it on any other site.
Activate two-factor authentication (2FA) to protect your account from hacking.
Using a digital wallet
If you prefer to keep your assets in a decentralized wallet, there are many options, such as Trust Wallet or MetaMask.
But be careful! Your phone that carries the wallet app must be well protected, so do not download suspicious files or apps to avoid hacking that could lead to the theft of your funds.
Medium investor
A medium investor is someone who owns assets ranging from $10,000 to $1,000,000. This category is very diverse in its needs and ways of securing its funds, so I will try to cover most of them.
Keeping assets on a trading platform
If you are keeping your assets on the platform for trading purposes, it may make sense to ensure ease of executing buy and sell orders.
But if your goal is storage, it is better to keep your assets in a wallet of your own.
If you are going to use a trading platform, it is essential to elevate the authentication level to level two or company verification, as this verification provides the platform with more information about you, enabling it to help you recover your account in case of hacking.
Using a digital wallet
In this case, you have two options: app wallets or hardware wallets.
App wallets
If you own, for example, $100,000, it is better to buy a separate phone dedicated only to the cryptocurrency wallet app, and place an independent SIM card in it.
It is advisable not to connect this phone to a WiFi network, relying only on cellular data, which reduces the chances of being hacked.
Hardware wallets
Among the best available options: Ledger, Trezor, Safepal. All of them are reliable and widely used.
Important advice: Never save your private key on the cloud or any electronic storage service, as it opens the door for hacking.
High net worth investor
A high net worth investor is someone who owns assets exceeding $1,000,000. This category includes high-profile traders and companies, and their security measures should be more complex.
CZ mentioned that Binance spends billions of dollars on security systems, and this is also true for most large companies, where a simple mistake can lead to losses in the millions or even billions.
How do high net worth investors protect their assets?
One of the best ways that top traders adopt is to buy a laptop specifically for the Linux operating system, install the digital wallet on it, and then completely disconnect the device from the internet.
This may seem exaggerated, but this is the same method used by Vitalik Buterin, the founder of Ethereum! He mentioned in an interview that he keeps his device in a secure and completely offline location.
In the end, there is no single way to guarantee 100% protection, but the best security strategies can reduce the risk of hacking by 99.9999%.
Therefore, you should study how you use digital assets, diversify your protection means, to minimize risks as much as possible. So always remember that security in cryptocurrencies is your personal responsibility!
