5 simple crypto security tips

5 simple crypto security tips

For Cybersecurity Awareness Month, we’ve got some simple tips to help you protect your crypto and all your online accounts. [Narisara Nami via Getty Images]

There’s never a dull moment on the blockchain. Here’s what you need to know this week:

5 ways to boost your crypto security. We asked the experts about the best ways to protect yourself online.

The crypto market reached new all-time highs. Bitcoin’s record value is only part of the story. We look at the big picture.

The most intriguing quotes of the week. From outcry about retinal scans to Elon Musk’s Twitter feed, and everything in between.

Security Briefing

Hackers keep getting smarter, but protecting your crypto is easier than you think

It's been a big week for crypto: after the first two Bitcoin futures ETFs launched, Bitcoin and Solana hit new all-time highs and Ethereum came close to setting a new record of its own. But as crypto becomes more mainstream, cybercriminals who target crypto holders are getting more creative and persistent. That's why Coinbase’s security team has put together a simple guide for protecting your crypto and all the other valuable data you store online. Here are the takeaways.

  • Use a password manager. Humans are really bad at remembering passwords, which is why too many of us choose simple phrases and repeat them across multiple websites. Password managers (like 1password and Dashlane) generate strong, secure passwords and store them for you — no memorization required. Use one. (Want to see if your passwords have been exposed by a known data breach? Check out haveibeenpwned.com.)

  • Enable 2-factor authentication (2FA). 2FA can protect an account even if a hacker steals your password. There are several types of 2FA, ranging from less secure (SMS-based, where a verification code is sent via text message) to more secure (an app that generates verification codes like Google Authenticator) to most secure (a hardware security key like a Yubikey). We strongly recommend choosing a stronger method than SMS, because hackers can steal texts with a common method called “SIM-swapping” — in which your phone number is transferred to another device. If no other option is available, enable SMS 2FA — but if that’s not possible, consider using a different service.

  • Protect your seed phrase. A seed phrase is a string of 12 to 24 words that is literally the key to a non-custodial crypto wallet like Coinbase Wallet or MetaMask. Anyone with access to your seed phrase has access to the crypto in that wallet. If you lose or delete your wallet, you can restore it with your seed phrase — but if you lose your seed phrase, you lose your crypto. (For many users, keeping crypto in the “hosted wallet” that comes with every Coinbase account is a more convenient option. You can add another layer of security without having to manage seed phrases by moving some crypto into a Coinbase Vault.)

  • Be wary of “airdrops." If you’re a fan of NFTs or DeFi, you’ve probably encountered airdrops — in which a project rewards early adopters by sending tokens to their wallets. But in recent weeks, our security team has been tracking an ongoing phishing campaign involving airdrops. In the scam, randomly airdropped tokens appear in your wallet. If you try to interact with them, you’re prompted to connect your wallet to a website that looks like a DeFi app — but actually gives hackers permission to drain your holdings. To protect yourself, don’t interact with airdropped tokens from unknown sources, don’t connect your wallet to websites advertised by airdropped tokens, and don’t keep too much crypto in a wallet you regularly use to interact with crypto apps.

  • Don’t brag. In the sage words of Kendrick Lamar: be humble. Just like a brand new Lambo in your driveway could make you a target for burglars, flashing your gains online could make you a target for cybercriminals.

Market Update

Crypto market cracks $2.7 trillion as Bitcoin hits new all-time high just short of $67,000

Following a record-breaking week of trading for the U.S.’s first-ever Bitcoin ETF, BTC surged to a new all-time high on October 20 (just a dollar shy of $67,000). But Bitcoin wasn’t the only success story over the last week: Ethereum, DeFi, and some institutional investors all reached major milestones as crypto’s broader market cap climbed above $2.7 trillion for the first time. Let’s take a closer look.

  • Two futures-based Bitcoin ETFs shattered trading records last week after listing on the New York Stock Exchange and NASDAQ. ProShares’ BITO, the first to launch, became the fastest ETF to surpass $1 billion in assets held after joining the NYSE last Tuesday. Valkyrie’s BTF fund followed on Friday, trading $10 million in its first five minutes on NASDAQ. Seven more funds are pending approval in the following weeks.

  • Ethereum’s market cap notched a new all-time high north of $510 billion, as ETH prices came close to matching May’s all-time high of $4,384. Now, some market watchers predict that ETH futures ETFs (try saying that five times fast!) could arrive this year. Ethereum’s blockchain is also home to many of the most popular decentralized finance protocols.  

  • According to new research from Goldman Sachs, DeFi has reached nearly $100 billion in total value, up more than 900% from the first half of 2020. As the report notes, “user adoption may also relate to longer-running trends including digitalization, globalization, and declining trust in centralized institutions.” 

  • Fixed-income giant Pimco, which manages over $2 trillion in assets, announced that it would gradually move into crypto. Another traditionally conservative fund made a similar statement this past week: The $5.5 billion Houston Firefighters’ Relief and Retirement Fund invested $25 million in BTC and ETH.

  • Mastercard announced that any bank or merchant on its global network will soon be able to offer crypto services to it’s 2.8 billion cardholders. Mastercard users will be able to buy, sell, and hold crypto as well as earn crypto rewards and turn points into BTC. Meanwhile, Visa (which owns a CryptoPunk) has announced plans to make its global network an interoperable hub for all forms of digital payments. And in an earnings call this week, American Express’s CEO shared his belief that digital currencies can make cross-border payments “a lot more seamless” (the company also invested in a crypto exchange last year).

Why it matters… With two crypto futures ETFs publicly trading in the U.S., eight-year-old predictions that such products could bring a wave of fresh capital into the cryptoeconomy now appear prescient. Meanwhile, institutional investors increasingly see BTC as a useful hedge against rising inflation — and even traditionally crypto-averse funds are beginning to see the appeal. That could be a massive deal, given that pension funds hold more than $35 trillion globally.

Takes

Elon Musk tweets about memecoins (again!), Jack Dorsey predicts “hyperinflation”

  • Doge whisperer… In response to a tweet last week noting that the Tesla and SpaceX founder would likely become the world’s first trillionaire, Elon Musk jokingly replied: “*In Dogecoin”. After the tweet, DOGE prices jumped 5%. A fan also asked Musk how much SHIB he holds. After Musk’s one-word response (“None”), the second-biggest dog-themed crypto sank 20% on Sunday, but has since reached a new all-time high as of Tuesday.

  • Eyes of the world… After the cryptosphere responded … poorly to Worldcoin’s plan to distribute a “new global cryptocurrency” in exchange for scanning everybody’s retinas, co-founder Sam Altman tweeted, “I definitely underestimated the visceral reaction to using biometrics.” 

  • Hyped up?... Twitter and Square CEO — and longtime BTC advocate — Jack Dorsey tweeted a stark prediction: “Hyperinflation is going to change everything. It’s happening.” But at least one legendary fund manager remains unconvinced. Responding via Twitter thread, ARK Invest CEO Cathie Wood predicted that deflationary forces “will overcome the supply chain-induced inflation that is wreaking havoc on the global economy” after the holidays.    

  • Deep thoughts… During an interview with Axios, Sen. Rand Paul (R-Ky.) — who accepted BTC donations during his 2016 presidential run — pondered “whether or not cryptocurrency could become the reserve currency of the world as more and more people lose confidence in government.” 

  • Animal coinservation...The World Wildlife Fund in Germany announced a series of NFTs featuring endangered species. The organization explained: “The number of the respective works is limited to the exact number of still living specimens of the respective animal species depicted.” So while 1,063 mountain gorilla NFTs are available, there will only be 22 vaquita whales. All proceeds will be used for conservation efforts.

Token Trivia

What is a good way to improve your online security?

A

Use strong, unique passwords

B

Turn on 2-factor authentication

C

Maintain a low profile

D

All of the above

Find the answer below.

Trivia Answer

D

All of the above