We recommend buying Ledger Hard Wallet.
The remarkable growth of cryptocurrency in 2017 was explosive! Hundreds of thousands of people around the world foresaw the inevitable rise of decentralized money (the government can't control). Most of them have seen massive surges in their wealth and the best news is that this trend is still so early!
The growth in market cap value, ICO’s and the influx of new investors into the crypto world in 2017 resulted in the creation of more millionaires monthly than in any other investment portfolio.
Unfortunately, many have entirely lost massive fortunes. Hard drives have been thrown away, exchanges have been hacked, and phishing attacks have drained accounts completely. The root of all these cases are the same: there was a single point of failure in the storage of funds.
Luckily, you're reading this article and will gain the knowledge necessary to prevent any chances of losing your wealth! Decentralizing your wealth guarantees that an attack will not leave you broke in this digital wild west gold rush!
Attacks, Hackers, and more Attacks.
The rapid growth of cryptocurrency has received unsolicited attention from hackers more in the last one year. In early December 2017, about 4,700 bitcoin was stolen by hackers who broke into Slovenian-based bitcoin mining marketplace, NiceHash. In another attack, startup company Tether lost some of its tokens to hackers in a multi-million dollar attack. Not forgetting the infamous Mt. Gox exchange attack in which over 850,000 bitcoins were stolen in a series of attacks between 2011 and 2014. This remains the largest attack in cryptocurrency history till date.
Crypto hacks happen almost every day; people unwittingly get their phones and emails hacked and end up losing their cryptocurrency in the process. These incessant attacks continue to raise questions concerning the security of cryptocurrency and measures taken by investors to safeguard their cryptos.
But, there is no cause for alarm! Cryptocurrencies by themselves are extremely difficult to hack. The attacks and losses recorded are in all cases due to vulnerable platform structure in the case of exchanges and ICOs or human error and careless in the case of crypto holders or owners. In addition, coins stored in soft storage like online wallets and mobile apps are the most susceptible to this kind of attack.
If exchanges and ICOs with sophisticated platforms, security systems, and robust funding can be hacked, how can you protect your crypto?
Horcruxes – Lesson’s from you-know-who
In J.K. Rowling's Harry Potter, antagonist VODLemort (pun intended) was able to survive a deathly experience by storing his soul into seven magical items hidden around the world. These items were referred to as a horcrux. VODLemort was immortal until every horcrux was destroyed.
Destroying two, four or five alone wouldn’t have been enough to do the job and that is assuming you knew where to find them.
For those looking to invest smartly in cryptocurrencies and not just Bitcoin, Ether is currently one of the top choices.
J.K Rowling’s Harry Potter may have been set in a world of fantasy, magic, imaginative creatures and characters but the concept behind Horcruxes is not only smart and ingenious but fully applicable in the real world especially in safeguarding your cryptos against hackers and malicious attacks.
Safeguarding your cryptos the Voldemort way.
Horcruxes, Voldemort, and Harry Potter may be fiction but the concept of splitting and storing your cryptos in various devices is practicable and smart.
Storing your cryptos on a single hardware wallet is very risky as any hack could clean you out taking you back to zero. On the other hand, if you were to "horcrux" your coins by splitting them across multiple devices, losing a key may cause you to lose some of your coins leaving the rest safe and untouched.
For instance, if you were to lose the keys to your altcoin wallet, you would still have bitcoin and ethereum to fall back on.
A practical example is to put Bitcoin in one hardware wallet, Ethereum (and Ethereum-based tokens) in another hardware wallet, and other altcoins in another. This is the best way to mitigate the risk of storing everything under one key.
An unspoken rule of cryptocurrency is to never leave your coins on an exchange. Depending on your investment strategy, you may choose to leave only what you need for day to day transactions or take your coins off completely.
Software wallets (Hot storage) and Hardware wallets (cold storage) are the most common methods of storing cryptocurrency. However, many experts agree that the method with the least risk is cold storage. This entails storing your cryptos in devices with no internet connection. In this way, hackers have no way to access your cryptos, keeping your coins safe.
The two most common cold storage methods are explained below
1. Hardware wallets: These are little devices that look like USB drives, often with built-in LCD screens. They act as physical offline stores for your tokens with built-in LCD screens that provide the owner with information about the contents of the device.
Popular hardware wallets include Ledger Nano and Trezor.
The Ledger Nano is a cold storage hardware wallet that can be used to safely store your Bitcoins, Ethereum and other smaller alt coins. Using the Nano is easy as it comes in the shape of a USB drive with a built-in LCD screen and two buttons that allow you to see the status of your wallet at the push of a button.
Trezor, on the other hand, is also a hard wallet that stores bitcoin private keys offline. The difference is that it allows you safely sign transactions by connecting the device to your computer via USB even if the computer has been compromised.
You can learn more about the different hardware wallets available and their features here.
2. Paper wallets: Paper wallets are a cold Storage method (offline method) for storing your cryptocurrency. Holding private and public keys physically printed on a piece of paper reduces the risks of getting hacked and is generally more secure than online or software wallets. Human error and carelessness are the only threats to crypto stored this way as losing your paper wallet mean losing your cryptos.
Bottomline
As the cryptocurrency market cap continues to grow, more millionaires will be made and the threat of hackers and malware built to steal your coins will always be present. Putting an end to hackers may be beyond you but reducing the amount of crytpos they can access is something you have some control over.
Don’t get hacked into poverty, Horcrux your coins now!
