Protecting Your Bitcoins Against Fraud

Published
June 23, 2020
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ZenLedger is partnering with Casa, number one provider for secure storage of Bitcoin

Fraud and security issues have always been a downside of investing in crypto. In fact, nearly 4 million Bitcoins are estimated to be lost forever (that’s almost 20% of the total supply!). If you are interested in protecting your crypto assets (and you should be!), keep on reading.

Best Practices in Securing Your Crypto

We’ve worked with Casa to prepare a few security best practices we think all crypto investors should know about:

  1. Use a password manager - we recommend either 1Password or LastPass.
  2. Consider a VPN - we like Nord and ProtonVPN, but there are many good options.
  3. Enable 2FA everywhere you can - avoid using SMS for 2FA, which leaves you vulnerable to SIM swap attacks.
  4. Never enter a seed phrase into a device connected to the Internet.
  5. Self-custody at least a portion of your crypto asset investments - rather than leaving them on an exchange
  6. Don’t overcomplicate it - generally speaking, accidental loss is much greater threat than theft

Two Pillars of Secure Storage of Your Crypto

You don’t need to be very tech savvy to invest in crypto, but if you do invest in crypto, you should know basic concepts around privacy and security - otherwise you risk losing your assets. Let’s look at two of them and see why they are so important in order to keep your crypto secured.

Self-custody

The first one is self-custody, which means holding your assets personally, rather than with an institution.Bitcoin or other cryptocurrencies can’t be a systemic hedge, the thinking goes, if investors are beholden to financial institutions to access their wealth. This is well understood in traditional contexts (gold bars in a home safe, or cash in your mattress), and has become increasingly popular with crypto investors in 2020; both with active traders who want to access their coins instantly without waiting for approvals, and long-term investors who want the strongest long-term security. Trezor, Ledger, or steel plate backups are probably the best known examples of self-custody.You always have access to your coins, but the downside is that the process of personally securing your devices can become hazardous and unmanageable, and there’s no one to turn to for help. In essence, you’re trading custodial risk for risk of user error.

Multisig Security

‘Multisig’ is another key concept to keep in mind. It’s short for multi-signature, and it means that spending coins requires more than one approval or “sign-off.” Today, nearly 6 million BTC (50 billion USD) are held in multisig wallets. It’s an important concept because the best way to protect your coins is to eliminate single points of failure - i.e. a single exchange login, a single hardware wallet, or a single seed phrase - and multisig provides this of the box.By keeping different signing keys at different locations, investors can use multisig to build incredibly secure and durable self-custody systems (Glacier Protocol is an excellent example). These techniques are used by the strongest institutional custody solutions, such as Coinbase or Anchorage.

About Casa

We like Casa’s service because it brings together both of these important concepts. Casa offers privacy-focused memberships for Bitcoin investors. They’re an excellent option if you want to hold at least a portion of your Bitcoin personally, rather than with an exchange or third party.Memberships start at $10 per month, and Casa also offers premium memberships ($1,800 - $5,000 per year), which include Bitcoin inheritance planning, white-glove support for large transactions, privacy audits, and other services previously only available to the ultra high-net-worth.

Why use Casa

For those of you interested in self-custodying your coins, Casa is the easiest and safest way to do that. It replaces the unforgiving UX of managing seed phrases with 24/7 support and some of the best design we’ve seen in crypto.All Casa wallets are multisig, which gives you greater protection against theft, loss, or user error than a hardware wallet, and it’s much easier and quicker to send and receive funds.Like ZenLedger, Casa also believes in user privacy. We both share an investor in Castle Island Ventures, and they’re co-founded by Jameson Lopp (@lopp), one of the most outspoken privacy advocates in Bitcoin today. All that’s needed is an email address and first name (or alias), and many clients are anonymous and there’s no KYC.We’ve also been impressed with their inheritance solution, and have been excited to realize that like ZenLedger, they frequently work directly with parents and families.For more detailed tips on security topics, you can also check out these items from their blog:

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