There is no doubt that security in the cryptocurrency market is essential and necessary. Unlike your traditional money in your wallet or bank account, where there are many controls and regulations that provide you with significant protection, and even if you are stolen, 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 protecting them and avoiding theft and hacking lies personally with you. Therefore, you must learn how to protect your assets before you learn 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 security procedures and available tools in detail, but some may find it somewhat complex, so I will simplify it by dividing security strategies according to the size of the investor:

  • Small investor

  • Average investor

  • Large investor

Small investor

A small investor is someone who has investments of less than $10,000. For this type of investor, the available security measures align with their usage, often involving holding assets either on a trading platform or in a digital wallet on their phone.

Holding 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. Additionally, some platforms implement strict transparency measures that allow you to know if they hold users' assets 100% or not.

After choosing the platform, the second step is to secure your account to the maximum extent possible:

  • Use a separate email specifically for your account on the platform, and do not use it on any other site.

  • Enable 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 beware! The phone that carries the wallet app must be well protected, so do not download suspicious files or apps, lest you expose yourself to a hack that could lead to the theft of your funds.

Average investor

An average investor is someone who has assets ranging from $10,000 to $1,000,000. This category is very diverse in its needs and methods of securing its funds, so I will try to cover most of them.

Holding 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 operations.
But if your goal is storage, it is better to keep your assets in your own wallet.

If you are going to use a trading platform, it is essential to elevate the authentication level to the second level or business verification, as this provides the platform with more information about you, enabling them to assist you in recovering your account if it is hacked.

Using a digital wallet

In this case, you have two options: app wallets or hardware wallets.

  • App wallets
    If you have, for example, $100,000, it is better to buy a separate phone dedicated only to the cryptocurrency wallet app, and put a separate SIM card in it.
    It is preferable not to connect this phone to WiFi, and to rely only on cellular network, which reduces the chances of it being hacked.

  • Hardware wallets
    Some of the best available options: Ledger, Trezor, Safepal. All are reliable and widely used.
    Important advice: Never store your private key on the cloud or any electronic storage service, as this opens the door for hacking.

Large investor

A large investor is someone who has assets exceeding $1,000,000. This category includes major 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, as a simple mistake can lead to losses in the millions or even billions of dollars.

How do large investors protect their assets?

One of the best methods employed by top traders is to buy a laptop specifically for Linux operating system, install the digital wallet on it, and then completely disconnect the device from the internet.

This may seem excessive, 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 safe place that is never connected to the internet.

In the end, there is no single way to guarantee you 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, and diversify your protection methods to minimize risks as much as possible. So always remember that security in cryptocurrencies is your personal responsibility!