The world of digital assets has seen rapid transformation. In addition to intellectual property and media files, blockchain-based assets, such as NFTs, cryptocurrencies, and tokens, have gained popularity.
Whether you’re a private or an institutional investor, protecting your digital assets is of utmost importance. Luckily, there are numerous effective strategies you can employ to secure financial information and ensure compliance.
Here’s a closer look at five such strategies:
1. Set Strong Passwords
It might sound repetitive, but using strong passwords is one of the most effective ways to protect digital assets. In case of a security breach, the password will be your first line of defense.
Set complex, unique passwords for individual or client accounts. Refrain from using common words or patterns as they can be easily guessed.
Moreover, discourage password sharing and educate employees on the importance of safeguarding their passwords. Consider using a password manager to securely store all passwords.
2. Ensure Regular Backups
Regular data backups can prevent losses. In the event of accidental data loss or a security breach, you will have a copy of everything stored in a secure location. This will simplify recovery, reducing downtime and improving productivity.
Experts suggest storing sensitive data, intellectual property, and information about blockchain-based accounts on the cloud. You can access this data at any time after completing the authentication process.
3. Implement Authentication Protocols
Speaking of authentication, consider implementing strong protocols to prevent data loss. Methods like two-factor authentication (2FA) and biometric verification are preferred. This will prevent unauthorized personnel from gaining access and making administrative changes.
4. Leverage Digital Custody Solutions
For institutions working with crypto and other blockchain-based assets, availing custody solutions can make a world of difference.
For further clarification, let’s analyze the role of custody solutions in safeguarding crypto assets. Cryptocurrencies are transferred through a decentralized network called the blockchain. It is a digital ledger that stores the details of every cryptocurrency transaction ever made. Owners can access their assets and make transactions using cryptographic keys.
A crypto custody provider will protect these cryptographic keys and make them accessible for users.
A reliable crypto custodian, such as BitGo, offers a myriad of safety features. This includes:
- Hardware security modules
- Cold storage options
- Multi-signature access
- Institutional compliance
- Asset coverage
- Scalability
- Transparent policies
Pro tip: Choose a digital asset custodian that complies with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. This will ensure peace of mind.
5. Use Secure Devices and Networks
As digital assets become mainstream, cybercriminals are using sophisticated methods to access confidential information.
Always access cryptocurrency assets or accounts on a secure network. Avoid using public Wi-Fi, as bad actors can intercept your data. If a public Wi-Fi network is your last resort, use a Virtual Private Network (VPN) to create a secured tunnel for transactions. Constantly monitor your accounts and immediately report any unusual changes.
For cryptocurrencies, consider using offline wallets. This is especially useful if you want to store a large amount of crypto and won’t need it for some time. Work with a reliable custodian to ensure complete protection.
