Security is something that is often discussed not only on Hive but throughout cryptocurrency. There is no doubt securing your private keys is vital. Interacting with blockchain is much different than dealing with a bank or some other traditional financial institution. There is no "password reset" button.
At the same time, we know a lot of hacks occurred, especially in 2022. Much of this is due to faulty smart contracts. Nevertheless, there is a lesson there we can take to heart.
For this reason, we have to utilize all the tools we can to protect ourselves. Many of the developers and technical people are Hive are doing things to enhance security. However, we can aid by doing our part.
In this article we will cover what I believe to be a simple yet practical way to protect ourselves.
A Lot Of Money
What happens if $HIVE reaches $1? $10? $100? Have you truly considered this?
The point being made is how much money, in USD terms, will be in your wallet? More importantly, how vulnerable is this?
One of the lesson that I take away from the hacks on Ethereum and some of the other EVMs is to avoid the honeypot. This is a single wallet that has a massive amount of money in it. It is a point of vulnerability because of the risk-reward that is in place.
In other words, am I going to spend hours trying to hack a contract with $100 in it or go after the one with $2 million? The answer is pretty clear.
While not a digital security expert, one thing I did learn is that a big part is simply creating a hassle. It is better to keep throwing obstacles in the way. As things get more difficult, those with nefarious intentions tend to move on. This is a world of "low hanging fruit". That is what is sought.
It is the concept applied with some of the time delays on Hive. The conversion times, 3 day delay on deposits, and 30 day window for governance are all deterrents. So is the 13 week power down. We all know this is a hassle to deal with and that is a good thing.
Going back to the first question in this section, let us take $HIVE at $5. For those who have 20K or more HP, this is $100K. It is not the largest sum in cryptocurrency but not an amount anyone wants to lose.
If this is all in one wallet, it is a point of vulnerability. Certainly being powered up is a protection yet that is one level. Why not go a bit further?
This is my goal, a process that I started.
Multiple Wallets
Hive Power is, by default, somewhat secure. However, liquid $HIVE along with HBD is not. The latter is either liquid or in savings, still presenting an opportunity. Having too much in a wallet might be tempting to some.
Therefore, my solution over the first half of 2023 is to increase the security tied to my accounts. This will start with simply spreading my holdings over more wallets. This way if one happens to get accessed, it is not a major honeypot.
We often discuss decentralization and all the merits. Ironic that we do so with our money sitting in one or two wallets.
Powering Down
The process is going to be a hassle (and that is a good thing). To start, this is going to require powering down my accounts. This could cause a temporary disruption in delegation and curation. Nevertheless, it is part of the process.
My idea is to spread the HP over many different wallets, then delegate it back to the main ones used for curation and engagement. This way the HP (and resource credits) are available, just resident under different accounts.
Another areas of disruption is going to be with governance. By powering down, the 30 day power up window is initiated. Again, this is a hassle but unavoidable.
The final area is in those projects that HP was delegated to. Here we see a time lag before the voting power is return to them.
Diversification in this manner makes sense. Do not put all your eggs in one basket is the old saying. I guess we can adapt it to not having all your crypto in one wallet.
Layer 2
Another area we cannot forget about is Layer 2. Right now, the numbers tend to be small; it is a bear market after all. However, what happens if one of your favorite games or projects takes off. It is not uncommon to see people with hundreds of thousands of a particular token. Of course, it tends to be in the same wallet as everything else.
What does a 25 or 50 cent price on your favorite token do to your account? Is this an amount of money, in USD terms, that you are comfortable with under one key?
It is equally as important to spread the Hive-Engine and DLUX holdings out. Many of them are not staked, hence susceptible. Moving them to some alternate accounts is probably prudent.
In Conclusion
Hive is flying under the radar right now. However, many of us believe that is not always the case. When the day arrives that Hive does get attention, it is going to attract all kinds of people. Unfortunately, not all of them will be good actors. The are going to be individuals with nefarious intentions.
There are many systems in place on Hive to protect people. The long power down is one of the most beneficial. So is the account recovery system. Nevertheless, the step of spreading one's holdings out before the masses arrive is probable a good idea.
One final point: use multiple different accounts for the recovery. Why go through this process if one can access one accounts and reset the passwords on all of them?
Remember, the goal is to simply to be a hassle. Make things more difficult for those trying to access the honeypot that is in place. There are other tools in place such as Hive Authentication Service along with a hard wallet that can help. This is just another layer in the process.
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