5. Use 2 Factor Authentication
You should be using this to secure your email and bank account already, but if you’ve never heard of 2 factor authentication (or 2FA for short) it basically means that attackers have to steal your phone or resort to complex MTM attacks to steal your Bitcoins.
This application is available for both Android and iPhone. Once installed and set up, the application generates a new code every 30 seconds. This means that in addition to your password, that you have a pseudo-random rotating code which has to be entered before someone can access your account.
Using the application is as simple as signing in with your normal password and email address, and then entering the code displayed on the screen of your phone. The passcode is displayed just like the above picture.
Authy (I highly recommend this application for all 2FA users):
Authy is identical to the above application with one key difference, your codes are stored in the cloud. This means you never have to worry about losing access to your accounts if your phone is lost, stolen, or broken. (Assuming you have remembered the password of course.)
A Yubikey is a physical token which comes with the added security of being “unhackable.” Your phone or computer can be compromised with a software attack but the Yubikey cannot. The Yubikey is used by Google, the DOD, and some of the top organizations in the world. It is one of the best 2FA devices in the world.
If you are wondering if your bank or favorite website is compatible with 2FA, just examine this handy list.
4. Hardware Wallets
A hardware wallet keeps your Bitcoin’s private key secure by creating a physical barrier between your wallet and potential attackers. This is the go to method for just about anyone who wants top security with limited hassle. The only downside is cost compared to using paper wallets or free software wallets.
There are a number of hardware wallets but many are limited in the scope of their cryptocurrency compatibility. For example, if you own Ethereum your options are limited because Bitcoin’s widespread popularity means most hardware wallets are made for Bitcoin. So be sure that the wallet you purchase is compatible with your cypto of choice.
The Trezor is compatible with Windows, Mac, and Linux computers. All the software running on the Trezor is open-source. This means that anyone can audit it and verify the security of what is inside. This was one of the first hardware wallets ever commercially available for Bitcoin.
Keepkey supports Bitcoin, Testnet, Litecoin, Namecoin, Dogecoin, and Dash. The wallet doesn’t support Ethereum as of yet but developers claim support is on the way.
KeepKey is a little bit cheaper than the Trezor despite having a very nice interface.
Ledger has quite a few affordable wallets of differing styles. All the styles are great for different reasons, but the main difference is the price. Hardware wallets used to be prohibitively expensive and these are all very affordable. However only the Nano S supports anything other than Bitcoin. (The Nano S supports Ethereum as well as Bitcoin.)
3. Paper wallets
Paper wallets are easy to use (relative to the bitcoin system in general), cheap to make, and very secure. However they can be lost, stolen, or accidentally destroyed. Fortunately they can be printed multiple times or imprinted onto almost any material. There are plenty of guides about creating them out there, but this is my favorite because it’s easy. There are ways to make paper wallets even more secure which I will be generating in a later post.
2. Multi Signature Wallets
These are very secure even when you use them for every day wallets. But they are really complex for your average user, even when companies try to make them easy to use.
The principle is simple enough, split control of a wallet into multiple pieces and then require a majority of the pieces to release control of the funds. However in practice it ends up confusing most users. I plan on covering these in more detail in a later post.
This is painfully obvious but I would be remiss if I did not comment on the necessity of good passwords.
- The easiest way to create good passwords is to use a set of random words which are easy to remember such as, “wooden chandelier bakery burlap.”
- Keep the password longer than 12 characters, the longer the better.
- A great way to test passwords is to use howsecureismypassword.net, it gives you feedback about your password so that you can get a better idea about what makes a good password.
- Adding symbols and numbers creates stronger passwords, but longer passwords create more entropy, which is a fancy way of saying “harder to break.”
- Use a unique password for each site and service.
- For really secure passwords, use a password generator and a password manager like LastPass.