The greatest threat to existence and sustainability of the digital currency industry is security. We live with increasing frightening high rate of electronic fraud, hacking and other online financial crimes. The blockchain technology behind the bitcoin wallet is hack proof. That is, it is practically impossible to hack it because there are copies of every transaction distributed across several computing units globally. However, there are little deviations from standard online account best practices that can make an account vulnerable. This is a post on how to secure your wallet. It is a follow up to How to Create Your First Bitcoin Wallet on Blockchain- https://cryptoego.com/viewtopic.php?f=7&t=5
Securing your blockchain wallet is an important step after account creation. It would prevent unauthorised access to your account and losing access to your funds. On blockchain.info, there are three main stages involving series of intermediate steps:
• Prevent losing access to your funds
• Prevent unauthorized access to your wallet
• Advanced security options to harden your wallet
So, let’s start. Login to your blockchain wallet. On your home page, click on “security center” located at the left hand side of your screen.
At this stage, we are at the first level. We have verified our account using our e-mail, so we’ll proceed to setup the backup phrase by clicking on the “Backup Phrase” button. You will need to provide your wallet password
Now, what is the backup phrase? The backup phrase consist of 12 unique, non-related words that can be used to provide backup access to your account should you have a problem with the normal process of accessing your account. The backup phrase is very important because blockchain.info do not store your password. After clicking the Backup Phrase” button. Click to download the “recovery sheet”. You can print the “recovery sheet” or simply make an empty list with numbers ranging from 1 to 12.
The 12 words would be displayed on your screen. Carefully, write them down on your printed recovery sheet or your handwritten list.
Four words will be requested at different positions (e.g ninth position or third position) out of the 12 to complete the backup process, please refer to your recovery sheet for the order in which they are written. Click on “finish” to complete the process.
The backup phrase and the order in which the words are written is very important. For instance, if you lose your wallet password or there is a problem with blockchain.info website. The phrase will be used to recover your account. As such, you must protect the recovery phrase as it is the proverbial “keys to the kingdom”. The recovery sheet should be safely stored away from prying eyes.
Next, we setup a password hint. It could be a short riddle phrase that could help joggle your memory and will make no meaning to an outsider.
Stage 2 has to do with how to prevent unauthorised access to your account. Here, we set up our phone number and enable 2 step authentication/verification.
Provide your mobile number (e.g +447444888222) and click submit. You will need to verify the number with the wallet authentication code sent to you. Type in the code and click on “verify”.
Next, we setup a 2-step authentication login. What is 2-step authentication? This is a process whereby you are granted access to an account after presenting two separate pieces of evidence that you are indeed the owner of that account. It is a two layer security door to your account. An example is when you want to perform transactions on the cash machine. The cash machine requires two things from you – your ATM card with the embedded chip and your PIN. If any of this is missing or invalid, access is denied. These processes on a cash machine to verify your identity is a two factor authentication (2FA) procedure. The bank card is the possession factor (what you have) and the PIN is the knowledge factor (what you know).
Now that we have a basic idea of what 2 step verification is, let us secure our account with it. There are three options provided by blockchain – google authenticator, yubikey and a mobile number.
Considering convenience and security, I recommend the google authenticator option and I’ll give my reasons shortly. For you to use the google authenticator you must download the app on your smartphone.
Using the app, scan the bar code that shows up when you click “Use Google Authenticator or Yubikey”. When your device captures the QR code, it will display a 6 digit number that changes every 30 seconds. Provide the number and click “Enable 2FA”. That’s it. 2FA is setup.
You could use your mobile number instead, although that is less secure than the authenticator. Just click on “Use your mobile number” and you can verify with code that would be sent via text message. Next time you want to login to your wallet, you have to supply three pieces of information- your wallet ID, password and your google authenticator (2FA) code from your smartphone. On the other hand, if you are using your phone number, you have to supply the verification code that would be sent via text.
The main reason I prefer the google authenticator method is because it is more secure than receiving a code via text. Reason being that calls and text messages can be intercepted and rerouted within mobile networks to another number with or without your knowledge. If that is the case, a third party can have access to your verification code. On the other hand, for someone to have your google authentication code, he/she will need to have access to your smartphone which will no doubt be secured by a strong pin, password or fingerprint. That’s a whole lot of trouble to go through to access your account. The second reason is that of convenience. You carry your mobile phone with you all the time and it just makes more sense to use a secure channel provided through an app without need to send codes through vulnerable networks.
Although Yubikey is more secure than the other two but you need to have either a USB device or a smartphone that supports NFC technology to be able to use that feature. So I will not dwell on that. But we will go with google authenticator for now.
The third and final stage to secure your wallet is to block "Tor "requests. The Tor system makes browsing the web anonymously possible by hiding your real IP address using a series of fake ones. With this, you can visit a website and they will not know that you were there because your IP address will not be logged. The Tor browser is used for these and is one of the means hackers try to access secure accounts without revealing their identity. You can configure your account to reject these set of request by clicking on “block”.
After completing these steps, your security center should look like this.
Congratulations, you have succeeded in securing you wallet!
On a final note, keep your recovery phrase document in a safe location along with your most important documents. Be careful whenever you are typing your login details on https://blockchain.info website. Make sure you are on the right website and not https://blockehain.info (notice the "e") or any other variant. Avoid suspicious e-mails containing links about your blockchain wallet. Also, There are many fake online investment websites like coinfever setup to rob you of your digital currencies. If you are in doubt, please ask questions or do a quality search online. Kudos to the PreciousOne!
Digital currencies: banks, fund managers and transaction managers.
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