Best security practices for safeguarding digital assets
More people are investing in cryptocurrencies and NFTs than ever before — and that’s a good thing! As people move their assets and wealth online, we come ever closer to the fully decentralized Web 3.0 with air-tight information security.
However, in the meantime, cybercriminals and plenty of other digital threats can make it tough to keep your digital assets safe, even if you have all the necessary tools. So today, let’s break down some of the best security practices for safeguarding digital assets that you can employ immediately.
The importance of protecting digital assets
Despite the theoretical security of digital assets like cryptocurrencies and NFTs (non-fungible tokens), these assets are — in many ways — uniquely vulnerable to a wide range of digital threats and theft types. Whether you’re investing in crypto or looking to transition valuable real-world assets to the digital realm, knowing how to protect your assets is vital.
Think your crypto tokens are totally secure? Think again. Cybercriminals collectively stole $3.8 billion in cryptocurrency just in 2022, 15% more compared to 2021. And in any given year, crypto and digital theft account for approximately 0.71% of market capitalization. That’s much higher compared to the market cap rate for theft of traditional assets and currencies.
On the bright side, there are many security practices you can leverage to safeguard your digital assets across the board. Let’s take a closer look.
Use hardware wallets for offline storage
First, you need to use a hardware wallet for offline storage. Also called “cold storage,” this is the practice of transferring your crypto assets and other digital valuables to an offline, totally secure hard drive or other storage device.
Since it’s offline and can only be connected to a computer via cable, there’s no chance of a hacker or some other cybercriminal getting access to your digital goods. However, one should be careful when connecting a cold wallet to an Internet-enabled device, such as a PC.
Hardware wallets are particularly popular for storing crypto wallet keys — this is, in fact, the best way to ensure your crypto assets are safe and secure for years to come. But hardware wallets can also be used to keep NFTs and other digital assets safe in perpetuity.
Combine them with a real-world physical defense system, like a safe, and you should be set.
Leverage air-gapped systems and devices
You can also use air-gapped systems and devices. Offline hardware wallets are one example, but there are plenty of others. An “air-gapped” system or device has no network connections whatsoever, so they have to physically plug a cable into the air-gapped device in order to download data from it or transfer data to it.
You could, in theory, have an air-gapped computer as well. Just remove the network connection capabilities of the device, and hardline connections will be all that remain. In certain instances, this can be beneficial for corporate security. For example, having a set of air-gapped corporate databases for sensitive customer information will prevent anyone not on-site from getting access to crucial company information.
Utilize multi-factor authentication for your accounts
Multi-factor authentication, or MFA, is a vital security step you should take for all of your online accounts and assets. In a nutshell, MFA (also 2FA) involves using multiple forms of identity proof before allowing access to your online accounts, crypto wallet, and elsewhere.
As a basic example, you might require both a password and the answer to a security question to get your crypto wallet. Alternatively, you might require both your thumbprint and the answer to a security question, plus a password, before your cold crypto wallet can be opened or connected to a terminal.
To bolster your digital security even more, you should insist on a digital signature instead of a basic e-signature when accepting a critical document or acquiring digital goods. That’s because digital signatures are much safer compared to e-signatures or Simple Electronic Signatures since they use public key cryptography to make a document that can be verified to be untampered with.
Regardless, MFA improves digital security by requiring any would-be thief to breach multiple security layers instead of just one.
Update your passwords regularly
While passwords can certainly be effective security measures for your digital assets, you must update them regularly. Don’t use the same password more than once or for multiple accounts, as doing so could let a cybercriminal get access to all your data simultaneously.
Don’t forget to make your passwords strong, as well! A strong password should:
- Have a combination of capital and lowercase letters plus numbers and symbols
- Be sufficiently long
- Not refer to any elements in your life that can be learned by a skilled researcher
Learn how to spot and avoid phishing attempts
Phishing is an online scam that involves a cybercriminal pretending to be someone else for the purposes of getting key information, like passwords, encryption keys, etc. You need to know how to spot phishing scams and avoid them to keep your digital assets safe.
The most common type of phishing scam is the email scam. In these scams, you’ll receive an email from someone you don’t recognize, oftentimes requesting a response. If you ever notice one of these emails, delete it immediately without opening it. That’s the best way to prevent a virus from accidentally getting onto your phone or computer. (And since it’s easier than you think to fall for some of the more sophisticated phishing scams, here’s a guide on what to do if it happens to you.)
Invest in SSL certificates
SSL certification is an easy way to bump up the security of your digital assets and your website. SSL certification encrypts traffic going to and from your site, so it’s much harder for bad actors to lift information from you or other visitors to your site.
Having an SSL certificate is also important because many visitors or potential shoppers won’t visit your site (if you have an online business) without seeing the SSL padlock in the top left-hand corner by the address bar. The SSL certification symbol has become synonymous with security in general, so consider getting it ASAP.
Use premium DNS services
A domain name system (DNS) turns legible domain names and web addresses into IP addresses (for example, namecheap.com gets translated into an IP address when computers and networks request information from it, then gets translated back into its domain name for easy human understanding).
However, your digital assets can be compromised if you don’t use secure DNS hosting. It’s better to leverage premium, highly secure DNS services, such as Namecheap, to ensure that your website’s domain name is kept safe from potential interdictions. Premium DNS services are further beneficial because they:
- Can secure any domain you have in mind
- Provide faster hosting speed and better hosting resources
- Are easier to manage compared to less-than-stellar DNS services
Keep all of your digital assets safe
Ultimately, it’s up to you to keep your digital assets safe and secure in perpetuity. But you don’t have to do it alone.
Namecheap makes it easy to purchase an SSL certificate and get domain names with our Premium DNS offerings. Let us help you make your online operations much more secure and invulnerable to digital threats today!