How to protect your cryptocurrency investments: A Fundamental GuidesteemCreated with Sketch.

in steemit •  last year

This is my first instructional post. I hope you all find it helpful.

So you decided to buy Cryptocurrency. And lets say you got some Ethereum, Steem and Bitshares, making you diversified. Such diversity might prove profitable, but increases the amount of effort needed to secure them, as each must independently be secured. Let us begin with some of the basics.

Key understandings:

  • Any significant amount of money should never be stored on an exchange for any extended period of time.
  • Some assets are more difficult to store than others.
  • Use multiple USBS to store information, Title everything precisely (ex. Steemit Username).
  • Scale security with investment.

Depending on the currency and where it is located, the steps will vary. Let us consider the aforementioned investments beginning with securing your Ethereum.

Ethereum

  • If you have ethereum, it is likely that it is currently stored in Coinbase. If this is the case, and you don't have a significant amount of money invested, we can continue to store it on Coinbase, but only if we move it into the vault. This is a very simple and important theft prevention method for those that are not heavily invested.

new vault pic.PNG

vault create button pic.PNG

Step 1. Log into Coinbase.
Step 2. Go to accounts
Step 3. Go to + New account
step 4. Select Vault-->Name and create an Ethereum Vault
step 5. You are now able to move your Ethereum into the Ethereum Vault.

  • If you are heavily invested into Ethereum, you should consider purchasing either a Trezor Hardware Wallet, or a similar product such as the S Nano Ledger. If you do this method, you have an up front cost of about 160 or so dollars, but if you believe in your Investment, it is incredibly cheap for such strong offline protection. If you do purchase a Trezor, set it up and be sure to follow the instructions closely. Taking care to double and triple check the 21 word recovery seed which will allow you to recover your funds even in the event that your Trezor device is stolen or destroyed in a fire.

Step 1. Purchase a Trezor
Step 2. Fully set up Trezor taking great care and following provided instructions.
Step 3. plug that baby in and visit. Myetherwallet.com
Step 4. Click the second tab titled "Send ether and tokens"
Step 5. Select your device (Trezor) and Connect.
Step 6. You will be requested to export your public key. Do this, then enter your Trezor pin when prompted.
Step 7. Copy any of the provided Ethereum addresses listed, starting with 0x.....
step 8. Login to Coinbase and send a test quantity of Ethereum to the copied Ethereum address on the Trezor.
Step 9. Once the test amount is visible on your Trezor, proceed to send all of your Ethereum to the same address as before.

connect to trezor ethereum wallet.PNG

path for ethereum.PNG

At this point, your Ethereum has been secured, so long as you secure the Trezor and backup seed from circumstances like theft or fire. Do not store them together.

Steem

  • The great thing about diversifying into steem relates to its ease of securing it. This is however only true if the Steem that you own, is within a steemit account that you possess. If you own Steem and it is on an exchange, you are not benefiting from the security associated with REVERSIBLE TRANSACTIONS. That is correct, if your Steemit account is compromised and you lose your Steem on Steemit, you are able to recover the lost funds with a simple request. This is however only if you have your password and username! So let us secure it proper!

Step 1. Grab several USBS (two is fine). Plug them in.
Step 2. Make your Steemit account.
Step 3. Open either Notepad (Windows), or Textedit (Mac).
Step 4. Clearly indicate what username and password this file is associated with.
Step 5. Enter username and copy paste Password. I always Paste password several times for good measure.
step 6. Save as "Steemit login Information", and save within the USB you plugged in.
Step 7. Verify that the notepad did save onto the USB. Verify it opens.
Step 8. Do Not Lose The USB Backups. Do not overwrite with Vacation photos!

steemit notepad backup pic.PNG

save to usb! pic backup.PNG

This sort of USB backup for login information is effective for various types of currencies, including Peerplays. Specifically, this technique works for wallets that are accessed with just the username and Password. Some currencies on the other hand will require an additional step to secure, and require a wallet backup in addition to having the Password and Username.

Bitshares

  • Like many currencies now days, Bitshares uses both a username and a password, but unlike Steem you will need your password along with a wallet backup file. This Wallet Backup will be placed onto the USB, in addition to a Notepad backup of the username and password. The latter step can be seen in the steps provided above. If your Bitshares are still on an exchange, it is best to backup and secure your wallet before sending in your coins.

Step 1. Download and install the Bitshares wallet
Step 2. Create a password and username and generate wallet
Step 3. Once logged in, Log out and then back in to verify the password you entered is correct.
Step 4. Follow step 3-7 seen above within the section on Steem
step 5. In the Bitshares application go to File--> Export Wallet
step 6. Export Wallet Backup onto your USB.

wallet backup pic.PNG

Once you have a backup of your wallet with the password, you are golden. Now you just need to send your Bitshares from the exchange into your secured Bitshares wallet. Your deposit address is your username. And again, send a test amount first to verify you receive your asset.

I hope this was an easy to follow guide that was also helpful! Take it from someone who didn't lose any bitcoin in Mt.Gox, that the exchange is not the place for your coins.

Thanks!

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Solid info! Thanks for the great post. Hope to see more in the future.

Cheers!

🍒 I'm just starting out investing in cryptocurrencies so your post is very useful, now your are upvoted and resteemed :D

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and followed :D

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Thanks! Sorry for not replying sooner!

If you have any questions or something I can help you with in particular, just ask!!!

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Thank, if I do I will let you know :D

This is gold. So nice to have good instructions step by step! I will be referring back to this post often.

Superb article, very detailed and you nailed it. Keep the currency out or normal exchanges to secure it. I tossed you a follow if you want to follow back it would be appreciated. Keep up the awesome work!

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That's nice to hear. I spent a ton of time figuring out how to convey good procedures with understanding why it matters in the article.

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It is easy to let it slip away and not do it because the space moves so fast and there is always a new coin or something shiny and new to distract against just securing the basics. Look forward to reading more

Excellent info, thank you for this post.

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Thanks I hope it helped! Be sure to follow if you could! I would appreciate it!

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Done!

good article..