Keeping your digital assets safe
When Easy Crypto, the Kiwi crypto retailer making buying and selling instant and secure, launched in January 2018, brother and sister duo Alan and Janine Grainger had a vision to demystify digital currencies. They wanted to provide a safe, simple and secure way for any New Zealander to buy into the crypto market, no matter how much they had to invest.
A year on, the Kiwi platform has turned over millions in sales, with thousands of Kiwis onboard and clocking over 200% growth for the last quarter of 2018.
A full-service digital currency retailer, Easy Crypto offers end-to-end transactions in under one minute, with no prior experience or specialist knowledge needed. The retailer offers more than 50 currencies, from the well-known names including Bitcoin and Ethereum, to lesser known currencies such as Stellar or Nano.
“Cryptocurrencies have the potential to transform the way we transact, save, borrow and invest,” says Janine, who has a background in finance and economics and has previously worked for Westpac, PwC and in the public sector.
“But the user experience is complex, intimidating and fraught with risk, preventing widespread adoption of these technologies.
“At the moment the Kiwi crypto market is estimated at less than half a billion dollars per annum – compared with Australia’s AU$5.9 billion – and penetration is less than 1%. With these currencies now being used not just for payments but for applications from smart contracts to cloud computing and file sharing, there is huge potential for early movers in this space,” says Alan, whose background is in IT, including managing IT departments for global giants such as L’Oréal and Sanitarium and who now manages all aspects of Easy Crypto’s IT, including security and controls.
While recent publicity about the fall of one of New Zealand’s three cryptocurrency exchanges has left some Kiwis concerned about the security aspect of the digital currency, Janine says there are 5 easy ways for New Zealanders to protect themselves – while still reaping the benefits of the currency use.
1. Keep your computer malware
Investing in anti-malware software and running regular checks for the malicious software is critical, says Janine. Anti-malware software can pick up key loggers or computer software which could be recording anything a user does – such as copying and pasting private keys. A good place to start is with the free version of Malwarebytes - a highly regarded and very thorough malware cleaner: https://www.malwarebytes.com/
2. Use hot wallets for small amounts
You wouldn’t carry your life savings in your wallet. It’s the same with a hot wallet – a ‘wallet’ used to store digital currencies. Hot wallets are connected to the internet, whereas a ‘cold’ wallet is not.
While convenient and easy to access, hot wallets are not the most secure place to keep your funds, so consider them as the same as your physical wallet – a place to put your day to day spending, while keeping your savings locked away in a cold wallet.
3. Limit exposure to exchanges
Just as hot wallets aren’t the place to be storing all your funds, cryptocurrency exchanges aren’t a storage facility, or bank, for your funds. Exchanges are a platform for trading. If you’re not trading your funds, move them on, rather than storing them there.
4. Set up a
cold storage wallet system
The safest way to store your crypto for the long term is in a “cold storage” wallet. This is a completely offline storage method that is unable to be hacked.
A cold storage wallet is made up of what’s called a “keypair”. The keypair is two pieces of data – the address where you can send crypto, and the private key that lets you access the funds at that address.
By storing these two bits of information in an offline password manager, you can keep your crypto safe from any kind of hacking attempt.
Easy Crypto has a guide on how to, set up a cold storage “vault” where you can store all your different coins and keep your cryptocurrencies safe from any attack. https://learn.easycrypto.nz/how-to-keep-your-crypto-safe/
5. And very importantly - make sure you
have succession planning for when you
Earlier this year the death of a Canadian cryptocurrency exchange founder reportedly resulted in the loss of $190 million of funds because the founder was the only one who knew the passwords.
That’s an extreme situation. But it highlights the need for Kiwis to think about what will happen with their cryptocurrency when they die. Remember, this is currency – it has real value. And as such you need to ensure someone in your family, or an attorney can access it, by providing them with the passwords and access details, so they can retrieve it in the event of your death.