It’s no secret that blockchain transactions are easily monitored nowadays. One of the reasons why it’s become so easy to track blockchain transactions is because there has been an explosion in blockchain analysis firms. These firms have made tracking crypto addresses and unmasking their owners accessible to all.
Notably, there are many reasons someone would want to track a crypto wallet from plotting a heist all the way to tax purposes. Regardless of their reasons, you have a right to your privacy. Here’s how you can protect your crypto and preserve your privacy in 2023.
Never Give Private Details
It’s important to try and avoid giving out any personal information to third parties online, regardless of their stature. Even large world-leading platforms like Coinbase or Binance are not safe from data thefts and crypto hacks. As such, it’s best to always make up a new email address when you register for accounts.
Having a crypto login account email is smart because it prevents hackers from using your email to find other social media accounts. Most people have multiple social media accounts and many of these accounts have been around since MySpace days. As such, there is an incredible amount of data surrounding you, your friends, activities, and past whereabouts.
The last thing you want is for a hacker to use your email to gain access to all of this vital data. They could then duplicate the email and contact friends and family from your social media to get even more data on you. In the end, you’re making it too easy for hackers when you don’t use anonymous email addresses.
Another key addition to your security protocol is to use non-custodial platforms and wallets. Non-custodial platforms are the safest because all of your cryptos remain in your possession. The only way you’re going to lose your crypto in a non-custodial wallet is due to sending it to the wrong address or giving someone your private key.
Private Key Protection
Protecting your private key is the most important lesson you can learn in crypto. If you don’t want to be one of the many people who have sadly lost their private keys and therefore their crypto, there are some strategies to use. For example, always keep your key private and safely stored.
There are a variety of ways to do this. One of the best methods is to use some form of private key engraving system. The internet is filled with metal-based private key systems. You can even make some using nuts, bolts, and stamping files. This strategy will help ensure that your keys aren’t lost to fire or water damage as well.
Understand the Technology
The best way to remain secure is to understand the technology completely. Those in the know understand that Privacy in the crypto realm is a bit of a double-edged sword. In the early days, every pen thought Bitcoin was private. However, today it’s known blockchains like Bitcoin are 100% open and transparent.
Once you better understand blockchain technology, you will also learn that some networks are designed to be privacy-centric. These are networks like META 1 Coin that were built from the ground up to empower users and keep their holdings private from all prying eyes.
Privacy Centric Networks
There have always been projects that put privacy first. A perfect example of a privacy coin is Monero. Monero was one of the first privacy coins to enter the market and is still in use today. The token was designed from the ground up to keep users anonymous and transactions untraceable.
For many years, Monero was considered untraceable due to the use of RingCTs (Ring Confidential Transactions). However, there are reports that some organizations have unraveled Monero’s cryptography making it not impossible, but still highly expensive to track Monero transactions promptly. Despite the news, only high level experts can accomplish this task.
Zcash is another popular privacy coin at this time. Zcash utilizes a protocol called zero-knowledge proofs that make it very difficult to track. This protocol is very effective because it enables users to send transactions without revealing their wallet addresses to each other. In addition to this feature, the network conceals the transaction amount which makes it even more difficult to unravel.
Privacy Focused DeFi
DeFi (Decentralized Finance) is on the rise in 2023. This sector of the market represents the growing number of users that desire more decentralization and privacy from their platforms. Notably, DeFi networks are known to not require any personal information. For example, you can join the METANOMICs ecosystem simply by connecting your wallet.
There are a variety of reasons why this approach is beneficial to users. For one, it enables them to gain instant access to the plethora of wealth-generation tools available within the platform. Additionally, it protects users from future data thefts. There has been a huge uptick in the amount of personal information stolen from corporations and government agencies.
DeFi networks acknowledge this is an unnecessary risk and eliminate the need for you to provide this information in the first place. When you couple this with the fact that most DEXs (decentralized exchanges) are non-custodial, meaning you keep your crypto in your wallet until the point of trade, it’s easy to see how the DeFi movement has gotten so popular.
Keeping Bitcoin Transactions Private
Networks like META 1 indeed make privacy easy for users but what about Bitcoiners that want more privacy? What are their options? Unlike many of the latest blockchains, Bitcoin transactions have been under the microscope for over a decade.
That time has given forensic firms a lot of data to unravel the technical structure of the network. Despite this advantage, there are some cool options available to Bitcoiners who want to make it a bit more difficult for prying eyes.
Coin mixers are services that specialize in obfuscating your crypto transactions. They work in a variety of different ways with the same goal to mix your transactions with others to make it harder to decipher what Bitcoin came from where and when. The best mixers will send you crypto through multiple wallets and transactions of varying amounts.
Mixing is a great way to make your Bitcoin transactions more expensive to track. There are even mixers today that vary their fee to make it harder for forensic firms to figure out they have been used. Adding a mixer to your strategy is easy and low cost.
The Wasabi Wallet is a desktop option for Bitcoiners to consider. This unique protocol automatically integrates the CoinJoin system to make your Bitcoin private. CoinJoin enables multiple participants to combine their coins into one large transaction with multiple inputs and outputs. It also integrates TOR to further obfuscate your actions. These features make the Wasabi Wallet one of the most private options available to Bitcoiners.
Lightning Network Adds Privacy to Bitcoin
Another area of interest to Bitcoiners as of late is the second-layer protocol, the Lightning Network. This off-chain system gives Bitcoin access to a host of new features and functionalities. One of these new features that have been in the works for years is Bitcoin privacy options.
The Lighting Network functions through the use of private payment channels. Users can open these channels by funding them. Once open, they can conduct unlimited transactions for a fraction of the cost of using Bitcoin directly. Only once the channel closes, all transactions get added to the mainnet. This design enables the protocol to hide transactions more effectively.
Discrepancy is Key
One of the main factors in keeping your cryptocurrency safe from hackers is keeping it private. The fewer people that know you hold cryptocurrency and the better. Always remember there is a thin line between touting the benefits of cryptocurrencies and notifying everyone you know that you hold a healthy stash of coins.
This strategy means that you should never do things like post your balance on social media. There is a long list of people who went online bragging about how well they were doing by showing their wallets or large purchases like cars and luxury items. These individuals were either unaware or didn’t care that not everyone watching you has pure intentions.
There are horror stories of users accidentally posting their private keys or other vital information. For example, hackers can take your social media account to discover your email. From there, they can use a strategy known as phishing to seek out more personal data. This strategy can begin with an email asking you to confirm y our Twitter login or other info.
The goal of a phishing attack is to get you to give up personal data over time. Phishing hackers can be methodical in their approach. It’s not uncommon for them to spend over a year targeting their next victim. During that time, they will slowly amass enough information about you in the hopes of being able to eventually steal your ID to access your accounts.
Phishing attacks are on the rise and even large firms have fallen victim to this highly effective methods of infiltrating networks. You need to be vigilant in not providing personal information to sources. Every time you enter your name, phone number, email, or other information, it could be one day used to compile enough info to pull off hacks like sim card swaps.
Sim Card Swap
A SIM card hack is a horrible way to lose your crypto because it happens while you’re still using your device. The method behind the attack is simple. A hacker will gather enough data to fake your ID to your cell provider. This is why providing your phone number to social media accounts is very dangerous at this time.
The hackers will take your info and tell your phone company you lost your phone and to transfer the account to a new SIM card. The phone company will ask the usual verification questions and if the hacker can answer them, they can then swap your SIM card for theirs.
Once your card has been swapped, they can use their phone to access your apps and other accounts. SIM card hack victims are left without any crypto and a long hard battle against their cell phone carriers. One of the best ways to avoid this scenario is to leverage 2-factor authorization or biometric security measures.
2nd Factor Authorization
2-factor authorization is a method of securing your accounts using a time-sensitive code. The nice thing about this approach is that it prevents users from accessing your accounts even if they pull off a SIM swap.
The person would need to also have your device in front of them within 30 seconds of the transactions to approve the maneuver. Networks like META 1 Coin have employed 2factor authorization with surprising effectiveness.
Another option is biometric security protocols. These systems use your body’s unique characteristics to quickly verify your identity. Biometrics usually comes in the form of fingerprint or facial scanners. The good thing about these systems is that they are already incorporated into Smartphone. Since the tech is already in your hand, it’s nothing to use it to protect your crypto.
Not Full Proof
One thing to note about biometric security is that it’s not full proof. Biometric security systems improve your protection significantly. However, if you’re dealing with expert-level criminals or government agencies, they may be able to fool these protections.
Privacy is Step One in Crypto Safety
Now that you have a better idea of why you should keep your transactions private and safe, you are ready to trade some new projects. Remember that you should never give your private keys to anyone. If you do, you can expect them to remove your cryptocurrency from your account promptly. Also, stick with the privacy projects in this review and you are sure to make it very difficult for anyone seeking more insight into your crypto activities.