Introduction

Hello everyone, I hope you've been well lately. Today I want to share a particularly heavy topic that still pains me when I think about it. Just last year, due to insufficient security awareness, I lost $1 million worth of crypto assets in one go. I was devastated at the time - it felt terrible. Looking back now more calmly, although this experience came at a brutal cost, it gave me a much deeper understanding of cryptocurrency security.

To be honest, having been in the crypto space for so long, I always thought I was being careful enough. Whenever I saw news about others getting their coins stolen, I would secretly feel relieved thinking "at least I'm careful enough." Little did I know that this complacent mindset would eventually lead to my own downfall. Looking back now, I feel both regretful and sad. But since what's done is done, rather than dwelling in sorrow, I might as well share this experience to help more friends avoid falling into the same trap.

A Harsh Lesson

It was just an ordinary Wednesday morning last year. I had just finished my morning tea and, as usual, opened my computer to check my cryptocurrency investment portfolio. The moment I logged in, I was stunned - all the assets in my wallet were gone! My mind went blank and my hands were shaking. I quickly checked the transaction records and found that all assets had been transferred away in the early hours of the morning.

That feeling was like being hit on the head with a club. I immediately contacted the wallet's customer service, but their response made me even more desperate - my private key information had been stolen by hackers through a phishing website. This meant that the transfer of my assets was completely irreversible.

I completely broke down at that time. One million dollars, just gone like that. This was all my savings from years of investment and hard work, and it all went down the drain due to a moment of carelessness. For the next few days, I couldn't sleep well, couldn't eat, and was in a daze.

Later, when I carefully recalled the whole process, I realized I had made too many basic mistakes. First, I was too casual with handling private keys and actually kept backups in cloud storage; second, I hadn't enabled two-factor authentication; most fatally, I didn't carefully verify the website address when accessing exchanges and directly clicked on search engine ad links, which turned out to be a phishing site.

This incident taught me a lesson, making me deeply realize how important security awareness is in cryptocurrency investment. Don't you agree? No matter how high the returns, if it gets stolen in the end, isn't it all for nothing? And once stolen, it's basically impossible to recover because the anonymity and irreversibility of blockchain make these stolen assets completely disappear into the vast sea of cryptocurrencies.

Private Key Protection

After this painful lesson, I've become almost paranoid about protecting private keys. A private key is like your bank account password, but actually much more important. Because a stolen bank account can still be frozen by the bank, but once a cryptocurrency private key is leaked, your assets are completely exposed to risk.

Now I use a combination of cold and hot wallets to manage assets. Large amounts, like over 80% of total assets, are stored in hardware wallets. These assets barely move, and even when they do, it's after careful consideration. Moreover, I've distributed the hardware wallet's private keys in special ways, with part stored in a fireproof safe and part saved using special encryption methods. Even if thieves break in, they won't be able to get the complete private key information.

As for hot wallets used for daily trading, I only put in small amounts that need frequent operations, like 5-10% of total assets. This way, even if something happens to the hot wallet, the loss is controllable. And now I strictly screen my hot wallets, only using well-known wallets with guaranteed security.

Oh, and about private key backups, I never use cloud storage anymore. I use special metal plates where private key information can be engraved. These metal plates are waterproof and fireproof - they won't be damaged even if the house burns down. I've also prepared multiple backups, stored in different secure locations. Although this might seem like overkill, after experiencing the pain of having assets stolen, I'd rather be inconvenienced than take any risks.

Multiple Protections

Speaking of wallet security, my current view is: private key protection alone is far from enough - you must establish multiple protection mechanisms. First, I've now enabled two-factor authentication (2FA) for all my wallets and exchange accounts. Each login requires not only a password but also a verification code from my phone. To be honest, it felt really troublesome at first, having to take out my phone to check the verification code every time, but I got used to it.

And you know what? According to statistics from a security company, accounts with 2FA enabled have over 90% lower chance of being hacked compared to regular accounts. This data really makes me regret - if only I had taken this feature more seriously back then, I might not have experienced the asset theft.

Besides 2FA, I now set strong passwords for all important emails and change them regularly. Because many cryptocurrency accounts are registered through email, if the email gets hacked, the related cryptocurrency accounts are also at risk. I use randomly generated passwords that include uppercase and lowercase letters, numbers, and special symbols, and each account has a different password.

To manage so many complex passwords, I specifically bought a password manager. This software can securely store all passwords, and I only need to remember one master password. Of course, I set this master password to be especially complex and never enter or save it anywhere.

Recently I've also installed antivirus software on all my devices, and it's the paid professional version. Although it costs a few hundred dollars per year, compared to potentially lost assets, this investment is really nothing. These antivirus programs can monitor device security in real-time and immediately alert if suspicious activity is detected.

Phishing Prevention

Speaking of phishing websites, this is truly one of the most common and dangerous traps in the cryptocurrency world. Data from the fourth quarter of 2023 shows that cryptocurrency-related phishing attacks account for 35% of all online scams, which is quite alarming. Hackers' methods are becoming increasingly sophisticated - they completely copy the interfaces of well-known exchanges, even matching the details exactly, just to induce users to enter their private keys or passwords.

I've now developed a habit: carefully verifying the website address before visiting any cryptocurrency site. Because phishing sites often use domain names extremely similar to legitimate sites. For example, changing "binance.com" to "binnance.com," or "coinbase.com" to "coinbasse.com." These differences are really easy to miss if you're not paying attention.

Also, I now never directly click on search engine ad links, as these links might be advertisements purchased by phishing sites. I directly enter the official website address in the browser address bar or use previously saved bookmarks. And these bookmarks were only saved after repeated verification.

To further prevent phishing attacks, I've also installed several security plugins in my browser. These plugins can automatically detect suspicious websites and will pop up warnings if they discover known phishing sites. Although this protection isn't 100% reliable, it's better than nothing.

On social media, I've also become especially vigilant. There are now many scammers who impersonate well-known project teams or exchange customer service and attempt fraud through private messages. They might say your account has abnormalities and needs identity verification, then lead you to click a phishing link. For such private messages, my principle now is to ignore them all and directly consult official channels if I have any questions.

Software Security

Speaking of software security, this is also a particularly important aspect. I now pay special attention to all cryptocurrency-related software and immediately handle any update notifications. Because many updates are for fixing security vulnerabilities, delaying updates is like giving hackers an opportunity.

Remember last May, a well-known wallet had a security vulnerability that resulted in users losing over $5 million. Those users who didn't update in time watched helplessly as their assets were transferred away by hackers. This incident really impacted me, making me realize that software security can't be relaxed for even a minute.

Also, all the software I use now is downloaded from official channels. I don't dare use third-party download sites anymore, because software from these places might have been tampered with and could secretly steal your information after installation. Even when downloading from official channels, I check the software's digital signature to ensure it's indeed the official version.

By the way, my computer now also uses dedicated partitions. One partition is only used for cryptocurrency-related matters, with no other software installed and no web browsing. This can minimize the risk of virus infection to the greatest extent.

Asset Diversification

After this lesson, I now particularly emphasize asset diversification. Never put all your eggs in one basket - this saying is especially applicable in cryptocurrency investment. My current asset allocation is like this: 30% in hardware wallets, which is considered the safest; 40% distributed across different well-known exchanges, with no more than 15% in each exchange; 20% in multi-signature wallets, which require multiple people to sign for transfers and are very secure; the remaining 10% in hot wallets for daily trading.

Although this diversification strategy is more troublesome to manage, it greatly reduces risk. Even if something goes wrong with one wallet or exchange, the loss is limited. And when choosing exchanges, I'm also particularly careful, only selecting large platforms that are regulated, insured, and have good security records.

Oh, speaking of exchanges, I now set up withdrawal whitelists on each exchange. This means pre-setting addresses that can receive withdrawals, and if you want to withdraw to a new address, you need to wait for a 7-day confirmation period. This way, even if the account is hacked, hackers can't immediately transfer the assets away.

Security Tools

In terms of security tools, what I recommend most now is hardware wallets. Although they're not cheap, costing hundreds or thousands, compared to potential asset losses, this investment really isn't much. I've been using a Ledger for almost a year now, and the experience has been pretty good. The biggest advantage of these hardware wallets is that private keys never touch the internet, so even if your computer gets infected, it won't affect private key security.

Besides hardware wallets, I also use some professional security tools. Like VPNs, which can encrypt network communications to prevent information interception. And hardware keys, which are small devices like USB drives used for two-factor authentication, more secure than phone verification codes.

Recently I've also been researching multi-signature wallet technology. These wallets require multiple people to sign together for transfers, particularly suitable for team use or large asset custody. Although they're more complex to operate, their security is indeed undisputable.

Regular Checks

Security isn't a one-time thing - it needs continuous maintenance and checks. I now regularly spend half an hour every Sunday evening doing security checks. First is checking transaction records of various wallets and exchanges for any abnormal situations. Then confirming whether two-factor authentication is working normally for each account, as 2FA might fail after changing phones or reinstalling systems.

Then I check if any wallet software needs updates and handle them immediately if there are any. Then backing up important data, including private key information, address books, etc. I regularly update these data backups and store them in secure places.

Besides weekly routine checks, I also do a more comprehensive security audit every month. This includes checking if any passwords need changing, verifying if various security tools are working normally, checking if backups are complete, etc. Honestly, these tasks are quite tedious, but thinking about asset security, this effort is really worth it.

Summary and Outlook

After experiencing this asset theft incident, I have a completely different understanding of cryptocurrency security. I used to think security measures were optional, but now I understand that in cryptocurrency investment, security is more important than returns. Because no matter how high the returns, if it gets stolen in the end, then you have nothing.

This past year, I've rebuilt my security system, from private key management to software usage, from asset allocation to daily operations, making detailed plans and protections for each link. Although this seems troublesome, thinking about asset security, all these efforts are worth it.

Finally, I want to ask everyone: Have you encountered any cryptocurrency security issues? How did you solve them? Welcome to share your experiences and suggestions in the comments. After all, in this field, we are all continuously learning and growing.

Remember, in the world of cryptocurrency, security is always the top priority. After all, making money is easy, keeping it is hard. See you next time!