Online payment services, digital wallets and trading platforms are becoming more and more popular among consumers around the world. While digitalization may be convenient, it brings certain security risks.
Using online services safely requires a great deal of responsibility. Exchanges like Bitstamp offer their users additional security features to help them keep their accounts safe. These features include two-factor authentication, whitelisting, password change prompts, confirmation emails and other measures that can protect your funds.
Security precautions essentials
- Since online accounts are vulnerable to hacks, it is highly recommended that users take additional security steps to protect their funds.
- Your account and registered email address should be protected with two-factor authentication (2FA).
- Whitelisting prevents withdrawals to unauthorized addresses.
- A strong password and regular password changes can drastically reduce the risk for cryptanalytic attacks.
- 2FA and confirmation emails can protect your funds from unauthorized withdrawal attempts.
Two-factor authentication
The two-factor authentication (2FA) feature is a powerful way to help prevent unauthorized account access with an additional authentication step.
Besides the usual user ID and password details, an additional security code is typically requested on the login page. The idea is to have a random code generated in the app installed on a separate device, such as a phone, tablet or a dedicated authentication device. It is best to use a spare mobile device and keep it offline, away from the login information that can be obtained via email.
At Bitstamp, security codes are also required when confirming crypto withdrawals. This makes it more difficult for any unauthorized person to withdraw from your account.
Whitelisting
Whitelisting makes it possible to specify a limited number of addresses that you trust. These addresses are the only ones to which a withdrawal from your account can be made. Limiting withdrawal options helps prevent unauthorized access to your funds, even if someone were to break into your account.
Since a potential attacker can only send funds to a trusted address on your whitelist, your recovery options are greatly enhanced. A trusted friend or a legitimate institution may be inclined to return your funds if you can demonstrate that the transaction has not been approved by you.
However, whitelisting also reduces your ability to use cryptocurrency on a daily basis. You might find it more difficult to use your crypto wallet to purchase from crypto-endorsing merchants or transfer coins to exchanges that are not on your whitelist. Until you add them to the whitelist, no funds can be transferred from your account to their address.
Strong password
A strong password is crucial to securing your account against a cryptanalytic attack, such as a dictionary attack or even a brute-force attack. It should be a random combination of upper- and lowercase letters, numbers and symbols. The more characters the password has, the more difficult it is for an attacker to guess it.
A strong password should be at least 12 characters long. The string should not include any words, repetitions, keyboard patterns, biographical information etc. You should also avoid constructions that begin with an uppercase letter and end with a number or a punctuation mark.
Regular password changes are recommended for extra precaution. In case your login information leaks, your password has to be changed immediately.
When using the password change prompt feature, the service provider asks you to change your outdated password after a specified period of time. Keep in mind that password resets are not effective if the new password resembles your old ones.
Secure email
Online accounts are often linked to your email address. Password recovery and other important settings can be manipulated via email, so you need to secure your email account as well. A secure email should also feature a strong password and two-factor authentication.
Additional security features, such as email confirmations, are linked to your registered email. At Bitstamp, you can choose to have all withdrawals confirmed via email. If someone gains access to your account, your funds will not leave the account unless your email is compromised at the same time
Withdrawal confirmation and password recovery emails from Bitstamp also include an account freeze link. This feature blocks all account activity and prevents potential damage to your funds.
Other online and offline precautions
Be careful when using online services. Protect your computer with up-to-date antivirus software and watch out for phishing pages that are after your personal information. Do not use suspicious links or contact details that cannot be found on the official site of your service provider.
If you use a credit card for purchasing cryptocurrencies, we highly recommend that you consider using a 3D Secure credit card. Used by Visa and Mastercard, it offers card holders an additional authentication method to authorize online purchases and minimize fraud risk.
If you store your login information offline, keep it somewhere safe where only you can access it. As the world’s longest-running exchange, Bitstamp still provides a reliable trading environment for its users.
This webpage has been approved as a financial promotion by Bitstamp UK Limited which is registered with the UK’s Financial Conduct Authority. Please read the Risk Warning Statement before investing. Cryptoassets and cryptoasset services are not regulated by the Financial Conduct Authority. You are unlikely to be protected if something goes wrong. Your investment may go down as well as up. You may be liable to pay Capital Gains Tax on any profits you earn.