Cryptocurrency may indeed be a revolutionary new way to take control of your own wealth, be the bank so to speak, but as we have adjusted the way we store our wealth we also need to adjust how we safeguard our wealth. When we use traditional banks to store our fiat money we don’t have to be overly concerned with the security of our money as the banks (technically) insure against potential hacks, security vulnerabilities and fraud. However, with cryptocurrency our funds are only as safe as we make them. Your private keys are the vault, if someone has access to them your funds are as good as gone.
Different people have different ideas about what the safest course of action should be to ensure the safety of your crypto wallet, most agree that keeping your bitcoin and other cryptocurrencies on exchanges is a big no-no, however where exactly is the safest place for your private key is still a debate without a conclusion.
Crypto hardware wallets have been around for a while and although at first I was a little skeptical to the validity of their benefits I have overtime come around to the idea that they are indeed a better and more secure way to store your crypto. Ledgers Nano S is in our opinion the best option, however Trezor’s offering seems just as secure, we just prefer the look of the Nano S.
You can’t hide behind the Internet
Many people feel safe and secure sitting in their office or bedroom staring at their laptop screen, you cannot physically see anyone watching you, you have full control of your laptop, right?
Well, no, in fact you are rarely alone while you’re online. Whether it be a some autonomous piece of code monitoring your actions online or it be a physical entity directly monitoring you, either way your beloved crypto is always at risk.
Now wouldn’t it be great if everything you sent and received online was encrypted to ensure only the sender and receiver could access access the data.
Virtual Private Network (VPN)
VPN services have become a popular service in recent years due to the realisation that our own Governments are spying on us, thanks to Edward Snowdon more people have become aware of just how vulnerable and exposed we are when we use the internet. Virtual Private Network’s however can offer you considerably more security and privacy while browsing online.
Services such as Private Internet Access offer a range of features, but most importantly all connections online are secured by 256-bit encryption and IP addresses are anonymous and changeable to multiple Countries around the World. This can be especially useful now that certain Countries such as the US have banned its citizens from taking part in ICO’s – however, with a VPN you can set your IP address to Hong Kong for example and participate in any ICO you please.
So you’ve got your Hardware Wallet, you’ve got your VPN service set up now you want to get your crypto off from poloniex and Bittrex and stored away.
So ideally all this should be achieved on a PC or laptop which is generally disconnected from the Internet, though Hardware Wallets are safe and secure, they could potentially be hacked if your laptop is infected with malicious software designed to steal your private keys.
Ensure your VPN is running, connect your hardware wallet, create a new receiving address (automatic on the Ledger Nano) then copy this address to your withdrawal destination on the exchange – done.
Once all transactions have been made, disconnect your hardware wallet and switch off the laptop.
Crypto safe, now your next problem is what to do with your Ledger recovery key……….. Well, there’s always this, which was reported by The World Economic Forum:
Kon is taking me to see one of the vaults where Xapo, the company he works for, stores its customers’ bitcoins. It’s no ordinary vault: I’ve been told it’s inside a decommissioned Swiss military bunker dug into a granite mountain. Its precise location is secret, and access is limited by security measures that would put a Bond villain to shame.
Kon won’t tell me how much bitcoin is stored in the vault, but he says he sometimes takes customers with “millions” of dollars worth of the cryptocurrency stored with Xapo to tour the vault. It’s odd to think of a virtual currency needing physical storage, but just like your most precious photos, even a cryptocurrency needs some kind of material container. Xapo’s founder is the Argentinian entrepreneur Wences Casares, the “patient zero” of bitcoin among Silicon Valley’s elite. It was Casares who gave tech luminaries like Bill Gates and Reid Hoffman their first bitcoins.
Yep, thats right XAPO, bitcoin debit card provider and apparent bitcoin vault service provider have got a military bunker hidden in a swiss granite mountain. Seems a little excessive and i’m not sure the real security risks of a private key are protected by military bunkers, but I guess if your a Bitcoin millionaire all this James Bond style stuff can be a real blast!
Anyway, back to the subject in hand – VPN is an essential service for all cryptocurrency holders and traders. Many also use Bitcoin and crypto and a form of anonymous payment, however it’s not actually that anonymous, generally when you dip in and out of exchanges you are leaving a trail pegged to your IP address. But with VPN you can (if you know what your doing) send and receive bitcoin payments anonymously.
We recommend Private Internet Access, it’s cheap, it’s stable, it’s quick and you can even pay for the service in Bitcoin and some other cryptos!