Cryptocurrency has been a payment option in the retail sector for over a decade, and its use continues to expand. It has become a major financial asset, and more entities are investing in it in the long term. Recently, President Trump issued an executive order to include cryptocurrencies in the U.S. strategic reserve. Such an endorsement has only served to increase the value and credibility of cryptocurrency and make it an even more acceptable form of payment for businesses worldwide.
However, despite its strong blockchain technology, Retailers need to ensure that they take proactive steps to protect their digital assets and their customers’ transactions. Cryptocurrency security may be strong, but it is not infallible. The recent Bybit Hack, where approximately $1.5 billion in virtual assets were stolen by a North Korean Actor, is a stark reminder of the vulnerabilities that are present in the crypto space. Retailers must be aware of these challenges and ensure they are using the best security features to protect their crypto transactions.
One such is the crypto wallet. These digital devices store and manage cryptocurrencies, offering you top-notch security features that will put your mind at ease when making transactions on the blockchain. The key to finding the best crypto wallet in the UK is to first understand what they are and what features to look out for when choosing one.
Understanding crypto wallets
As a retailer, you first need to understand that there are different types of crypto wallets available. Understanding their differences will help you choose the one that is most suitable for your business needs.
Hot wallets and cold wallets
A Hot Crypto Wallet is one that is connected to the internet. In this way, transactions happen immediately and in real-time. They are perfect for day-to-day business transactions. However, they pose higher security risks because their transactions are constantly exposed to hacking attempts and phishing attacks on the internet. Cold wallets, on the other hand, are the opposite. They are offline storage solutions, meaning they are not connected to the internet. Because of this, they are safe from cyber-attacks and threats. The downside is that they are not suitable for daily transactions, and it takes a while to connect when information from them is needed.
Custodial and non-custodial wallets
Custodial wallets are exactly what their name implies. They are managed by third-party services that control the private keys of the wallet on behalf of the user. It is a convenient way for you to manage and secure your crypto wallet, but it requires trust in your service provider. Custodial wallets are usually the preferred choice of crypto wallets, and their value is expected to rise to $11.5 billion by 2032. Non-custodial simply means the wallet and its private keys are completely in your control. The responsibility for the security of your wallet lies in your hands and you must implement strict security measures to make sure you protect your and your customer’s assets.
Multi-signature wallets
These types of wallets need multiple people to approve before a transaction can be made with it. This is a good one for retailers that handle many crypto transactions because it provides multiple layers of security and prevents unauthorized access, which in turn reduces the chances of fraudulent activities.
Crypto wallet threats that retailers should be aware of
As technology advances, so do the tactics used by cybercriminals. As a retailer, you have to be current on the evolving security threats in the retail industry.
Phishing and social engineering attacks are the most commonly used to defraud businesses. Here, cybercriminals use any means to deceive employees and customers into revealing sensitive information about themselves or the business. This information can be used to gain unauthorized access to your crypto wallet. They also use malicious software to hack into your system, steal your private keys, or lock your wallet until you pay a ransom fee.
Another major threat to your crypto wallet is losing your private key. This can be disastrous, as your assets will be irreversibly lost. There are many horror stories of people losing their private keys and their fruitless attempts to get them back. You must implement strict key management practices, ensure your private keys and recovery phrases are securely stored, and ensure that your employees are properly educated on security best practices.
Best practices for securing crypto wallets
There are several security best practices that you need to know as a retailer to protect your wallet, business, and crypto transactions from threats.
- Use Cold Wallets for Large Holdings: As earlier stated, they are offline storage solutions and are perfect for storing large amounts of cryptocurrency. Since they are cut off from the internet, it is impossible for a cyber attacker to gain access and try to steal or hold them for ransom. It is easily the best security measure for plenty of crypto assets.
- Secure Backup and Recovery Strategies: No matter how small your business is, always have a secure backup and recovery strategy for your crypto transactions and wallet private keys. It is impossible to restore once the keys are lost. Proper key management is very important. If you are unable to handle it on your own, employ the services of a trusted third party.
- Employee Training and Awareness: In every security system, people are always the weakest link. Between 70% and 98% of cyber-attacks are successfully carried out through social engineering and phishing tactics. The attackers bait employees through fake emails, digital or physical impersonation, and dumpster diving to steal personal information that can be manipulated, sold, or held for ransom for payment. The only defence against this is constant security awareness training for your employees. A well-trained and informed employee is the primary security a business has against persistent threats to its business.
