Text of the Lesson 4

Hi, course participants!

In the previous lesson, we created a wallet and before planning your first cryptocurrency purchase, I suggest you learn about digital security rules.

In lesson 4, you will learn:

what are the security threats to your crypto assets examples of how people failed to follow security rules for storing cryptos and how it ended and a few rules to ensure the security of your computer, browser, and crypto wallet.

The lesson also includes a checklist: if you want to secure your crypto assets, I recommend completing all or most of the items on this checklist.

Who and how can commit illegal actions against you and take over your cryptos?

Your wallet can be hacked, malware can get onto your computer or phone, and attackers can gain access to your wallet using this program.

You can fall for a phishing site, a site that copies the interface of a real site to ask you to enter private data, and scammers will use this data to access your wallet.

There are examples on the market when currencies are created just to collect money from people, and then the creators of the cryptocurrencies disappear with that money. These projects are called SCAM projects.

And another common type of fraud is also related to direct deception: owners of telegram channels or Instagram pages convince their subscribers that they have to buy a particular coin now, after which the price quickly rises.

But in reality, the owners of the channel bought this coin much earlier than you and at a more advantageous price, and when the price rises high enough thanks to subscribers, scammers sell their major number of coins at a high price, and for the rest, the coin drops in price, so that the invested amount turns into dust.

I scared you a little, but so you can easily recognize such a fraudster if you ever encounter one. And it is important: if you are promised super-profits in a very short period of time, this is either a criminal or genious Elon Musk, but he also pumps and dumps, so be careful even with major opinion leaders!

Now I will tell you a few curious stories of how people themselves neglected the security of storing cryptos and paid large sums of lost money for it.

Programmer Stefan Thomas lost the password to his crypto flash drive and lost 7,002 bitcoins. Try to calculate how much it is today.

Entrepreneur Gabriel Abed lost his 800 bitcoins because he stored wallet access on his computer, and his colleague formatted a hard disk.

I love the TV series The Big Bang Theory, there is also an episode where the guys lost a flash drive with bitcoins that they had mined many years ago, and in 2017 they tried to find it, but their friend had also formatted it. Apparently, this is a very common and sad story.

James Howells threw away his hard drive, and Mark Frauenfelder’s wallet password, written on paper, was thrown out by the housekeeper.

Choose a secure location to store your cryptocurrency and keep your access to it safe.

We understand what not to do, so let’s go through some steps on how to protect your cryptocurrency assets.

First, your device — whether it’s a computer or phone:

  • Remove any pirated software.
  • Install and run antivirus software, which is also available for smartphones.
  • Watch for suspicious and significant drops in your computer’s performance, as attackers may connect to it and use its resources for their purposes.

Next, some rules for safe internet use:

  • Always use strong passwords and check whether your passwords are included in any breached password databases using specialized services. A link to one of these services will be provided at the end of the lesson.
  • Always enable two-factor authentication, which is an extra layer of security for your account. It may be sent as an SMS message from your bank or through a popular app like Google Authenticator.
  • Always check the website address you’re visiting to ensure it’s the real site and not a phishing site.
  • If you frequently use a particular website, bookmark it so that you’ll be directed to the original site.
  • Never use public Wi-Fi, for any reason.

Finally, let’s talk about crypto itself and its storage:

  1. Divide, it’s better to spread your assets across different baskets, different types of wallets, to reduce the risk of losing all your funds at once.
  2. Keep passwords and seed phrases in multiple, but secure places.
  3. This point is considered the most effective: set up a separate phone or computer without constant internet access for cryptocurrency transactions only.
  4. If you are sending someone money, carefully verify wallet addresses, they also can be «phishing», very similar but not the ones you intended.
  5. Find a trusted crypto exchange service with good recommendations and buy only from them. Even from trusted platforms, never buy large amounts in one transaction, always split large purchases into smaller parts.
  6. If you decide to get a cold wallet, buy only new and original ones. Buying a second-hand wallet is a reason not to trust the seller of such a wallet.
  7. Do not invest in or buy little-known coins, read news, study project websites, reviews, and social networks before investing or buying coins on an exchange.

And once again, I remind you that cryptos have no physical form — no iron coins or paper money, they are only digital currencies that can be bought only in digital form.

In this lesson, we have expanded our vocabulary with crypto terms, here are some new ones for your knowledge.

And the promised useful resource with an interesting name, Have I been pwned? — an aggregator of password leaks. Check your emails and accounts in services to see if they have been included in this database.

No one is immune to mistakes, but if you follow at least some of the above requirements, your chances of keeping your crypto assets intact and secure will be easier.

And in lesson 5, we will be ready to buy our first cryptocurrency on the wallet we have already created.

See you soon.