5 Steps to Protect Ethereum & Avoid Hacks

5 Steps to Protect Ethereum & Avoid Hacks

Why Should You Protect Ethereum?

In the past few months, the number of hacks on Ethereum has been rising. This has been worrying some as of 2017 and people are much more interested in buying a hardware wallet to protect Ethereum. Ethereum is one of the best performing cryptocurrencies in 2017. It experienced a 2800% increase in exchange market price in the last year and is according to some speculators, will overtake Bitcoin in 2018. Since the currency’s inception in 2015, it has been growing and so there’s a lot of people looking to invest in digital currencies.

Recent Ethereum Hacks

A few months ago, a hacker was able to break into many private multi-sig wallets made by Parity Technologies. The hacker exploited a critical vulnerability that existed in the code and was able to get off with over $32mn from private accounts. Multi-sig wallets are essentially wallets that require multiple signatures to validate a transaction.

Usually, this kind of wallet is much more secure for businesses and large private holdings. So, it shook the whole Ethereum community. Just after news of the hack came out, Ethereum dropped by 15%, from $230 to $200. A few hours later, the vulnerability was fixed but the Ether was lost. It came just a couple of days after the CoinDash ICO hack happened. CoinDash’s ICO was going quite well; they raised a few million dollars in the first hour of the ICO.

Unfortunately for them, a hacker was able to target them in their most vulnerable spot; their website. The hacker changed the address on the website to a private wallet and investors unbeknownst to them sent their Ether (ETH) directly to the hacker. Yet again, the vulnerability was fixed but the Ether was lost. That’s why you should think about protecting your Ethereum.

In order to avoid all of these issues, you need to invest not in an online coin wallet but in a hardware wallet. This kind of wallet isn’t connected to the internet and has many security measures to avoid hackings.

The Ledger Blue Hardware Wallet

ledger-blue-iphone 5 Steps to Protect Ethereum & Avoid Hacks

Ledger is one of the pioneers of the hardware Bitcoin wallet market. The founders had extensive experience in security and cryptocurrency trading before starting the company. The whole idea behind Bitcoin hardware wallet is that your Bitcoin information is not stored in a system with an internet connection. Essentially, if there’s an internet connection, people might be able to hack into the system. But, the Bitcoin wallet makes sure that you can be completely secure.

The technology inside a hardware wallet is pretty interesting as well. The wallets have a device called a secure element. Think of this secure element as a vault inside the wallet which uses cryptography to encrypt all of the data being stored. It’s like any other processor, it hosts applications and stores the cryptographic data. The company itself was founded by security experts so it’s pretty evident that they did a great job. In all, the Ledger Blue boasts provision of enterprise level crypto-security to every user.

The Ledger Blue boasts a secure element which is quite versatile, it can house many different applications securely. The secure element is locked by a pin code, which can be 4-8 characters long. This pin code is required every time the Ledger Blue is turned on. Moreover, when you set up your Ledger Blue, the device will generate a 24-word passphrase which you need to note down.

It’s a security measure which makes life much easier. This passphrase can be used to recover your account if your device is broken, stolen or lost. So, you can just buy another Ledger Blue and get all of your coins on the new device just using the passphrase. This way, you can protect Ethereum effectively with a device that will last you a very long time!

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About Article Author

Michael Serrano
Michael Serrano

Michael is an engineer and a bitcoin evangelist. He has been involved in cryptocurrencies since 2013. His biggest wish? 1 billion users of bitcoin, ether and litecoin by 2020. In the last 10 years he has worked for various early-stage start-up as a back-end developer.

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