Cryptocurrency is definitely here to stay, even though some countries, such as China, have forbidden its use, many others (including the U.S.) seem to be more relaxed. Some larger corporations started accepting the payment in bitcoins for products and services.
However, there can always appear a threat to digital wallet security. Although the Bitcoin transaction process is based on blockchain technology, making it extremely difficult to hack the cryptocurrency data, your app still needs to be carefully secured.
In order to properly secure your application, you need to be aware of the major security threats, such as scamming the users through fake cryptocurrencies, the fraudulent phishing technique, attempting to steal the cryptographic keys, slow down time, vulnerable transactions, and many others. Another easy way to hack your application is by using old password backups, so a hacker can create a recovery program and he can find out your data.
There is the Sybil Attack where the hacker restricts all the users’ transactions while he attempts to monitor the network with nodes. Then, the users can only connect to hacker-created blocks.
In case you are creating an app for bitcoin exchange, or if you already have one, you should keep in mind that more than 50% of the attacks, generally happen during the initial stages of developing the app, when the hacker can have more power than your developers. That’s why, if you decide to build such an app, you should hire a professional team of developers that would take the necessary precautions to avoid attacks. You must have a very good strategy, to avoid facing such attacks in the future.
Let’s dig deeper into the mysterious nature of crypto apps, and find out what are some ways to secure your application.
Cold wallets/ Hardware wallets
One of the first measures that can be taken to protect your app is using cold storage or a hardware wallet to store the Bitcoin values. This is also called the offline process since it does not require an internet connection. This method isn’t as hacking-prone.
It’s some kind of physical storage, close to what we know as USB drives. However, you shouldn’t store a significant amount of cryptocurrencies in cold storage; the safest way is to split the Bitcoins into 2 sections. The first can be kept online for trading purposes, which should be a small amount, and the second amount can be placed in the hardware wallet.
Create backup to remain on the safe side
You should back-up data to protect it from device failures and human errors. This would include Bitcoin stored in cold storage, and small quantities kept for trading. If it’s encrypted you can recover your stolen wallet. It is essential to encrypt your backups so that the fund stored online won’t be prone to theft. Also, make sure you use multiple locations to back-up your data, it’s safer than a single one.
Encrypting your Bitcoin wallet
Encrypting your Bitcoin wallet creates an additional layer of security. By using a passcode the wallet can be encrypted. The passcode allows you to lock your coins and the hacker will find it hard to take anything unless they know your passcode.
A strong password is crucial
You should already know this very well, but just in case you don’t, the password should be very strong. Add everything from caps to numbers and special characters. Don’t store it anywhere! And what’s also important: don’t forget your password, because it will be very difficult to get back your lost fund.
Update your software all the time!
Software updates are one of the most popular safeguards out there. The latest version of the software must be used regardless of which software you are using. The updated software keeps you up-to-date with the latest security fixes. It will also help protect the features of your wallet. If your app isn’t up to date, you can easily become the target of attackers.
Multi-Signature is needed
The multi-signature method has become the best way to protect your funds, particularly when you’re starting a project and you’re worried about preserving all the power to manage funds in one person. Typically, this feature functions in the same way that banks need signatories to account.
Add a 2nd layer of security using two-factor authentication
Simply put, two-factor authentication (2FA) is a second layer of protection which implies the development of a unique code in the app. This code, along with the username and password, is used to log into accounts you set up two-factor authentication on.
In short, two-factor authentication implies adding another layer of protection to your account (which in the cryptocurrency world is important). The reason 2FA provides protection is that the code is account-specific (so every account has its code), randomly generated, and in most cases only stored on the device you put the two-factor app on. Therefore, to get into a particular account, the most current version of the code for that specific account is needed.
This means that a hacker will need to get your code’s latest iteration from your physical device, and get your logins to get into your account!
Since cryptocurrency can not be recovered if it is stolen in most situations, two-factor is essential when using cryptocurrency exchanges or online wallet services.
Monitor the transactions to spot any suspicious activity
Especially when you have a crypto app, is very important to discuss with your development team, and opt for custom software, because is safer than out-of-the-box one and you can customize it and add any features you want. This way, they can also add for your app a monitoring tool, that will notify you if any suspicious transaction occurs. Such a tool will periodically check if your funds are still in place and will give you peace of mind without logging in to your wallet.
You can also add a feature that will block the invisible trackers and this way you can stay safe from sneaky hackers.
We all know the hackers have become more intelligent and technologically advanced today. So we must remain alert and keep the system and software updated at all times. In this regard, saving the Bitcoin values, creating a backup, and encrypting data are all important.
Also, tracking and analyzing relevant cryptocurrency news is a major but extremely important job. You need to keep an eye on the latest news that could affect your crypto app.
But if you’re ready to adopt a new method that stands apart from the highly centralized financial world, you should learn how to secure your own money. And while all these measures may seem a little difficult for less tech-savvy users, as soon as you transform them into your everyday routines, you will find that it’s not that hard.
By collaborating with a great team of professional developers, you can simplify all that. No matter what your app plans are, we can help! Our team of professional developers has many experiences working with cryptocurrency platforms to build stable, efficient, and highly functional apps. We would be pleased to assist you with the highest quality Cryptocurrency App Development Service and any other personalized application as per the client’s demands.