How do I keep my Litecoin safe and secure?
Many Litecoin holders ask themselves this question directly after buying their first coins, or after hearing the first horror story of someone that lost all their coins.
Every month, tens of thousands of Litecoin are lost due to various reasons. Some of the most common ones are hacks, phishing attacks, or sometimes even assault.
The main issue that people face when researching how to keep their Litecoin safe is that they realize that most of the information out there is not only very hard to understand but in many cases even inaccurate.
In something as crucial as security, it is important to only trust information from extremely trusted sources, since there it is possible for bad actors to benefit by spreading misinformation.
In this article, I will show you what exactly you need to do to keep your Litecoin safe and I will share some actionable next steps that you can follow right after you finished reading. Let’s dive right into it!
Never leave your Litecoin on exchanges
Many people decide to store their Litecoin on cryptocurrency exchanges for beginners like Coinbase, Binance, or Kraken since it is often easier to do so than setting up your own wallet. While this is definitely a simple option for storing your Litecoin, it is NOT a safe one.
It’s true that the above-mentioned exchanges are among the most trustworthy firms in the crypto space, however, that does not protect them from attacks from bad actors.
Back in 2016, Bitfinex was hacked and 120,000 Bitcoin were stolen. Bitfinex was the largest cryptocurrency exchange at the time and many people trusted it enough to leave all their coins on it, a mistake that you should never make.
In order to cover the losses, Bitfinex reduced the balance of all its users by a third. That means that if you had Litecoin on the exchange at the time, you would have permanently lost 30% of all your coins.
That being said, sometimes you will inevitably have to send some coins to exchanges. This will be the case when you want to buy more Litecoin, sell some, or make a short-term trade. In those cases it is important that the security settings of your cryptocurrency exchange are as safe as they can possibly be.
This includes activating two factor authentication, email confirmation to enable withdrawals, and of course setting a safe password that combines lower and uppercase letters, numbers, and symbols.
Be careful who you tell how much Litecoin you hold
The most important rule in cryptocurrency is to never tell anyone exactly how many coins you hold. Doing so is a significant risk for your holdings, your safety, and your family’s safety that is not worth taking. This applies to both social media and online forums, as well as close friends. You need to keep in mind that a friend, always has a friend, and while your friend won’t likely do you any harm, he may accidentally reveal your cryptocurrency holdings to someone that might.
The reason why it’s so dangerous to openly talk about your cryptocurrency holdings is that it is significantly easier for someone to steal your cryptocurrency than it is to steal your money from your bank account.
Why is that the case? Very simple: banks follow strict KYC and identification measures, meaning that you can almost always track a bank transfer back to an identity.
And as soon as the bank account of the bad actor is identified, it can be frozen and the funds are returned. On the other hand, if someone steals your Litecoin then all he has to do is transferring the coins to a wallet he controls, and they are gone.
There have been several cases where people did not only lose their cryptocurrency holdings but also their lives. Two of the most notable cases are the one of Pavel Nyashen, a Russian crypto blogger that was found dead in his apartment after openly sharing his holdings on social media, and the one of a Norwegian man that was brutally murdered after conducting an in-person Bitcoin trade.
With that in mind, you don’t have to completely shy away from talking about cryptocurrency. This space needs active discussions to keep growing and to keep capturing the minds of more and more intellectuals.
Especially if you ever attend a cryptocurrency meetup, you will immediately notice that one of the main topics of discussion between the attendees are the coins that they hold. So in summary, sharing with the world that you hold some Litecoin is great, however, you should never under any circumstances even insinuate that you might hold a considerable amount.
Look out for phishing attacks
Phishing attacks are a method by which a bad actor pretends to be a different individual or company in order to obtain personal information from you like a password, private key, or KYC information. Phishing attacks come in many forms and shapes, and with the advent of the internet, they became more widespread than they have ever been.
Some of the most common phishing attacks in the cryptocurrency world are the following ones:
- Twitter giveaway scams: In Twitter giveaway scams, the attacker programs twitter bots to imitate high profile individuals and claim that they are holding a “giveaway”. This giveaway then asks people to send a certain amount of LTC, and to expect to receive 10 times more LTC in return than what they sent. Of course, after sending your LTC you would never hear back from the scammer again.
- Telegram impersonation: Scammers leverage Telegram’s functionality that enables anyone to add someone to a group, without your permission. They create a group that aims to imitate a trusted platform, like Coinbase, and then ask you to send them LTC or to send them your password.
- Fake emails: In phishing emails, the attacker crafts an email template and sender signature that makes the email look like it was sent by the company or individual that he is impersonating. Before taking action on something an email tells you, always double check if the sender is indeed who he claims. When you’re in doubt, double check with the company in question by emailing their support email and ask if they sent you an email.
- Fake Ads: When browsing on search engines you always need to be very careful with ads you click on. There have been numerous cases of bad actors creating ads that imitate a legitimate cryptocurrency exchange, but that then link to a page controlled by the attacker which is used to steal your password.
Consider getting a cryptocurrency hardware wallet
After you moved your Litecoin off of exchanges, you now have two options to store your coins: on a regular cryptocurrency wallet, or on a hardware wallet. The first leaves you exposed to the risk that someone steals your private keys, while the latter makes that impossible.
Cryptocurrency hardware wallets are physical devices that store your private keys offline, which always leaves them out of reach of hackers.
Furthermore, most hardware wallets force you to approve transactions with the click of a button, which makes it impossible for someone to steal your coins unless he has physical access to the device.
So even if a bad actor for some reason gained access to your cryptocurrency hardware wallet remotely, he will not be able to withdraw any funds since he can’t physically press the confirmation button.
To find out which cryptocurrency hardware wallet is the best fit for your needs, make sure to check out our comparison table of the best cryptocurrency hardware wallets.
Pascal Thellmann is an investor and marketer focused on the intersection of cryptocurrency and the legacy financial system. He co-founded Bounty0x, which at the time was the largest crypto freelance platform. Now Pascal dedicates his time to CoinDiligent and trading. You can get in touch with Pascal Thellmann on LinkedIn.