Accidental loss and digital theft are the main dangers.
Knowing the essential security measures is key for bitcoin to last, says Lopp.
As was once said in an action movie and has been repeated ever since: “With all great power comes great responsibility.” It can be said that something like this happens with bitcoin (BTC). Since it is a disruptive resource in the history of money, there are threats that can put your security at risk, and you have to know how to identify them.
To raise awareness on the subject, Bitcoin developer and specialist Jameson Lopp published an article of his authorship in Forbes magazine in which details the most important risks that must face holders of bitcoin. In addition, he compared their order of importance with that expressed by the more than 1,600 participants in a survey that he himself organized.
5 steps to prevent threats to your bitcoin
Lopp is the founder and developer of the CasaHODL wallet, editor of the BTC Times portal and creator of other informative sites about Bitcoin and the Lightning Network. Taking into consideration all the informational baggage you have, it is interesting to know your suggestions on security matters.
Here are the top five threats you mention in your first edition of the “Lopp Threat Index” and how to be prepared not to fall for them.
1. Accidental loss
For almost 40% of the public surveyed and for Lopp, this is the biggest risk a person’s bitcoins face. And the numbers back them up: an estimated four million bitcoins have been lost. Doesn’t it seem so much? It is the fifth part of the 21 million that will be produced in all history.
This problem was more prevalent in the early days of the protocol, but technological advances such as seed phrases and multi-signature features have helped prevent it, Lopp says.
To prevent this economic tragedy from ever happening to you, the first thing you should do is back up your seed phrase in a way not connected to the internet and check it periodically. For example, in pencil and paper. If you have a significant amount of bitcoin, the author recommends using a multi-signature agreement.
2. Digital attack or theft
Jameson Lopp calls this danger “an ever-evolving threat” to the security of Bitcoin. The possibility of someone hacking into your account to steal your funds only underscores the importance of self-custody, he argues.
Again, at the dawn of Bitcoin this was a frequent occurrence because people used to leave their cryptocurrencies on the exchanges. This is something that, as CriptoNoticias has reported, can be dangerous, either for security reasons or for arbitrary measures that these platforms can take.
Today, with the proliferation of very secure wallets that are easy to configure and use, this threat has been largely contained, although you still have to beware of criminal practices such as phishing (key theft) or SIM swapping (SIM card implantation in mobiles).
Among the recommended measures in this regard, privacy (do not talk about your bitcoin in front of other people) and caution when receiving emails, messages and all kinds of proposals through social networks that may be scams or contain viruses that steal your data, stand out. as Loop himself explains in an article on Casa’s blog.
3. Expropriation by governments
For many people (27% of those surveyed) this is the second most important threat, although Lopp placed it third on his list. For the specialist, this fact is above all “a theoretical risk” and must be taken into account mainly “from a historical point of view”.
As it happened with gold in 1933, when the president of the United States Franklin Roosevelt prohibited its possession from a certain amount, this could also happen with cryptocurrencies. While it would be an “impractical” measure, that does not prevent the attempt from being made, Lopp says. The actions of states are “like a latent volcano that may explode one day,” he says.
If necessary, recommends Lopp, the first thing would be to take the funds of an exchange to several private wallets whose keys are not in a site that can be “physically violated.” Also, make purchases through operations Peer-to-peer o P2P is the most convenient, although it also carries its risks.
4. Physical theft
As well as 13% of his respondents, Lopp considers this to be the fourth threat to your bitcoin. These thefts, he assures, are related to the media and social exposure of bitcoin; both parameters are enhanced when the price of the cryptocurrency rises.
However, the specialist says that these robberies are rare. Anyway, better avoid them as much as possible by reducing exposure to unreliable counterparties when trading in person. Many times, these encounters can end in assaults, as CriptoNoticias has reported in past opportunities.
5. Unexpected inheritances
The fifth and final threat to Lopp is a bonus track on your list. It is about the inheritance of cryptocurrencies that the relatives of the deceased person cannot access. Generally, this occurs due to a communication problem, says the author of this ranking.
The solution to this threat seems obvious: establish and communicate a list of instructions to follow in the event of a mishap. Remember that Bitcoin is meant to last forever, and you need to make sure you make it happen through this kind of planning.
In short, Lopp concludes that you have to be alert to all threats and always evaluate the risks of each action. With practice and time, the author believes that you will find other threats that were not on the list and discover how to take care of yourself and your bitcoins. Self-discipline and self-custody are two key concepts on this path.