As we move the CCB community into the future, we recognize the potential dangers on the horizon. We know there are legitimate safety concerns in the decentralized space, and it’s important to us that those who choose to participate take every precaution necessary when navigating this wildly amazing new world.
Many of those in the space emphasize to do DYOR (do your own research), and while that is incredibly important, we feel it’s our responsibility to give you all the information and tools we can to help you protect your wallet and assets. We believe that the success of individuals benefits everyone in the space, and we offer these suggestions based on our experience. This information will be continually updated to reflect the most current information we have. This is an ever-evolving industry and we will continue to learn more about the best practices.
NAVIGATING THE ECOSYSTEM
Imagine you go to the bank and ask them to exchange your dollars for another currency, like euros.
You can think of a crypto exchange (like Coinbase) less like a stock market and more as a currency exchange.
Then you take the euros, put them in your wallet, and leave the bank.
In crypto, you will send your new currency (like ETH) to a crypto wallet (like Metamask), which allows you to "carry it" into the world.
Now you want to buy art, so you fly to Italy and use your euros to purchase that painting you've always wanted.
In web3, that art is in the form of an NFT, and instead of Italy, you will go to an NFT marketplace (like OpenSea).
1. IGNORE & DELETE YOUR DMs
If you don’t know the handle, DELETE IT! No one in any legitimate project will DM you a link to click. They will use official links only through their profiles, Discords, or marketplaces. Do not EVER click a link in a DM, especially if you do not recognize the sender’s handle. This is the number one tactic for scammers and hackers.
2. NEVER GIVE OUT YOUR SEEDPHRASE
Your seedphrase (different from your passphrase) is the 12 to 24 word phrase given to you when you set up your wallet. No one should EVER ask for your wallet’s seedphrase (or any other kind of password, for that matter). Your public wallet address is the only thing anyone should ever need from you, which can be seen by anyone through a blockchain viewer. If someone asks for anything more, it’s a scam and you should report them immediately!
3. KEEP YOUR EXCHANGE ACCOUNT AND ONLINE WALLET EMPTY
*After further research, this section has been amended.
There are advantages and disadvantages to where you store your cryptocurrencies. Storing your crypto on an exchange like Binance, Coinbase, and Gemini, while least secure, also offers the most liquidity and is necessary if you’re completing a lot of transactions over a short period. Online wallets like MetaMask or Kraken should be thought of like an everyday wallet–one used to carry what you need for everyday transactions. For more long term storage, the most secure options are either software or hardware wallets. These both use added layers of security, but whereas a software wallet is stored on a computer or mobile device, a hardware wallet works more like USB storage and can only be accessed when connected to a computer.
4. USE ADDITIONAL SECURITY
We highly recommend using Two-step Verification on any transaction. Exchanges like Coinbase allow text or email verification, and many wallets like Metamask will always ask you to sign a confirmation before completing a transaction. Some wallets allow an additional layer of security called a passphrase, which can be set up through the advanced settings. For the highest long-term security, a hardware wallet provides the best though least accessible option. Multi-sign wallets, which require multiple signatures to complete a transaction, are also very secure but require additional time and effort to access.
5. DO NOT LOSE YOUR SEEDPHRASE OR PASSPHRASE
This is crucial. You are responsible for keeping these things safe. If you lose it, and your account is locked, there is no recovering it. Write down your seedphrase and keep it in a fireproof box. We recommend having multiple backups in SAFE places. An encrypted USB thumb drive is a good secondary backup.
Despite being slightly outdated, this article gives you a good overview of how and where to store your cryptocurrency.
This is a great guide for choosing the best crypto wallet for you and cover online, software, and hardware wallets.
Here are some good basic guidelines from Coinbase.
This article from OpenSea discusses practices for protecting your assets.
More good tips from OpenSea on how to keep your crypto safe.
*NOTE: We do NOT offer this or any other information as financial, legal, tax, investing, or any other kind of advice. Please take every precaution you feel is necessary, as your investments are your own and at your own risk.