Best Practices for Safeguarding Digital Assets and Secure Trading

Protecting your digital assets is critical to your success as a trader. But how do you do it effectively? There are several key strategies. Of course, there are basics like using a strong password, securing your devices, and using reliable platforms. Let’s explore these strategies and how they can keep your digital assets safe.

1. Use Strong, Unique Passwords

A password is a hidden word that grants access. It didn’t start with computers. In ancient Rome, soldiers used passwords to identify friends from foes. During Prohibition in the 1920s and 1930s in the US, people used passwords like “Joe sent me” or “open sesame” to gain access to alcohol dens.

Fernando Corbato, an MIT professor, created the first digital password. He developed it for his large time-sharing computer to give each user private access. So, a password is the most basic security tool for protecting digital assets. It shouldn’t be just a buzzword. Use a strong password, as hackers constantly prey on weak ones they can quickly guess.

Strong passwords are a mix of letters, numbers, and special characters. Avoid using easily guessable information like birthdays, common words, or sequential numbers. Here are the characteristics of a good password:

• Length: Aim for at least 12 characters.
• Complexity: Combine all characters, including upper and lower case letters, numbers, and symbols.
• Uniqueness: Like in trading, don’t put all your eggs in one basket. Use different passwords for different accounts to spread the risk in case of a breach on one account.

Security experts often advise using a password manager to generate and store. Such a tool creates strong, unique passwords for each account and stores them to prevent you from reusing them elsewhere.

2. Enable Two-Factor Authentication (2FA)

2FA adds an extra layer of security. After entering your password, you must verify your identity using a second method, such as a code sent to your phone or a fingerprint. This makes it significantly harder for unauthorised users to access your accounts.

Before today’s two-factor authentication (2FA), there were earlier versions. The 2FA we know today was first sold by RSA in 1986 as a key fob. This fob had a small screen that showed a numerical code, which users added to their passwords. For over 20 years, many businesses and governments used this extra protection. It only became common on the internet in the past decade, as more people used online accounts and the number of hacks increased.

In addition to your username and password, you need to provide:

• Answer a question.
• Something you have (like a code sent to your phone or a fingerprint).

With 2FA, you must provide both forms to log in, so the password alone will not be enough to access your account. You must also produce a second form of proof.

3. Regularly Update Software and Systems

Software updates fix security problems and bugs that hackers might use to infiltrate. Thus, keeping your software up to date lowers the risk of cyberattacks.

Software doesn’t wear out like machines do. But software becomes quickly vulnerable since things move so fast in the tech world. Regular updates fix the bugs, close these gaps, and protect your devices from attacks.

Keep your operating system and applications updated. Check for updates regularly for software that doesn’t update automatically. Apply security patches as soon as they are available. Updating all your devices—computers, smartphones, and tablets—reduces the risk.

4. Use Secure Networks

You must know that public and shared Wi-Fi networks are vulnerable to security breaches. These networks are often not encrypted, making it easier for attackers to intercept data.

If you use such a network, employ a virtual private network (VPN) to encrypt your internet connection on unsecured networks. For home networks, protect them with a strong password and encryption.

5. Backup Your Data

Backups ensure you have a copy of your important data if the original data is lost or compromised. This includes personal documents, financial records, and critical business information.

Set up automated backups to save your data regularly without needing manual effort. Spread your backups in multiple devices and locations like cloud storage and offline on hard drives.

Periodically test your backups to make sure they can be restored if needed. A strong backup strategy helps you recover quickly from data loss incidents.

6. Educate Yourself on Phishing Scams

Phishing is a scam in which attackers trick people into giving away personal information. Sometimes, these scams come with harmful software, like viruses or ransomware. These scams often include fake messages or emails asking for personal or financial details. The messages might include links to fake websites designed to steal your data.

To protect yourself:

• Be cautious when unexpectedly requesting sensitive information.
• Before clicking on links, hover over them to see the real website address and look for mistakes.
• If you receive a suspicious message, report it to your IT department or service provider.

Educating yourself about phishing tactics can help you recognise and avoid these threats.

7. Secure Your Trading Platforms

A reliable, secure trading platform is crucial to protect your investments and personal information. A secure platform offers tools and protections to keep your assets safe.

Make sure the platform uses strong encryption to protect your data during transactions. Choose platforms regulated by reputable financial authorities to ensure they follow security standards. Opt for well-known and established platforms with a history of secure operations.

8. Monitor Your Accounts Regularly

Regularly monitoring your accounts helps detect unusual activity or unauthorised transactions. This includes monitoring bank accounts, trading accounts, and other financial platforms. If you detect the breach fast enough, you can mitigate potential damage.

Here is how to best monitor your account:

• Configure account alerts for transactions or login attempts.
• Regularly review account statements for any unauthorised or unusual activity.
• Report any suspicious activity and take corrective measures immediately.

9. Avoid Sharing Sensitive Information

Sharing sensitive data can put you at risk. Keep this information private to maintain the safety of your data. Sharing such details can lead to unauthorised access and fraud. Even innocent information can be combined with other data to threaten your security.

Best practices include:

• Use secure, encrypted channels for sharing sensitive information.
• Only provide personal or financial details when necessary and to trusted parties.
• Be cautious of unsolicited requests, especially via email or phone.

Final Thoughts

Many of us use digital technology every day. We have cryptocurrency, documents, photos, financial records, and personal data on our devices. It’s essential to keep these things safe. Even though digitisation brings convenience, we must be vigilant about how we handle these digital assets to keep them. Use a strong password or phrase and two-factor authentication (2FA) for extra security on your trading accounts. Also, ensure the platform updates its security features regularly to protect against threats. Remember, your security is your responsibility.