Warning: Don’t Leave Your Bitcoins on an Exchange

No matter which type of cryptocurrency you choose to invest your assets into, there is one rule that you should have about where to store these coins.  If you wonder if you should leave your coins in a cryptocurrency exchange’s wallet for convenience sake, the simple answer to this question is no.

Never, ever-ever, leave your money on a cryptocurrency exchange.  Why, you ask?  Because these storage areas can be hacked, plundered, robbed, and ripped off.  If you’re new to this game, and jumped in without really becoming familiar about the history of cryptocurrency, and the exchanges that serve them, then you probably haven’t heard the story about Bithumb yet.

Bithumb is a major South Korean cryptocurrency exchange, and there are reports out now about North Korean hackers breaking into this exchange.  We are being told now that hackers not only stole the personal information of users making trades on the exchange, but also ripped off over 80 million dollars’ worth of cryptocurrency.

How did they get all that money you ask?  Because people using the exchange stored their coins there.  Don’t get us wrong, sometimes it is almost impossible not to store your cryptocurrency on the exchange especially if you are trying to get in and out of a trade quickly. However, if you are a long term player who knows for a fact that you won’t sell within a week or so, then please be diligent and use some prevention measures to secure your money.

Can I leave my cryptocurrency in Coinbase, or similar type storage area safely you might ask?  The answer is generally no.  Coinbase was hacked not long ago, and the primary reason for this is that users preferred convenience over security because, like an online banking service, this storage area used only a username and a password for security.  It has become clear, that no matter how good you think your password is it isn’t enough protection in the crypto world.

Something like Google 2 Factor Authentication would be a good way to get you some added security for your accounts.  When you enable 2 factor authentication, you add an extra layer of security to your authentication. This authentication protocol uses a password first, and then requires the user to have a device that can receive a code that will be input to unlock the account.  No one else will have the device, assumedly, and only you will be able to receive the information that allows access.  Is this foolproof?  No, noting is foolproof as we all know, but it certainly is better than using only passwords alone.

The best way to secure cryptocurrency is to use a device built for storage like the Ledger Nano S or the Trezor hardware wallet. Cryptocurrency investors may also use desktop wallets with a computer, and if possible don’t use that computer for any other purpose except cryptocurrency exchanges and storage.  This computer should not be used for browsing the internet, connecting to game servers, or anything else that would give a hacker the chance to get into your system and try to steal your money. A cheap laptop should do the trick.

Remember, anything having to do with crypto, unless it is under your direct control all the time, is vulnerable, but taking these steps can give relative peace of mind concerning your cryptocurrency. Always keep in mind that convenience, in most cases, leads to vulnerability in the world of crypto.