When it comes to online security, there’s no such thing as “too paranoid.” That’s especially true when it comes to your Bitcoin.
While the cryptocurrency is decentralized and therefore theoretically immune to government interference, that doesn’t mean it’s invulnerable to hacking. In fact, all it takes is a single weak link in your security chain for your Bitcoin to be stolen.
If you store your Bitcoin on an exchange like Coinbase, that weak link could be the exchange itself. While Coinbase is one of the most popular and trusted exchanges in operation today, that doesn’t mean it’s immune to hacking.
In fact, there have been several high-profile hacks of Coinbase in recent years.
In 2016, for example, a hacker exploited a flaw in the Ethereum code to steal $50 million worth of Ether from Coinbase. And in 2018, a different hacker was able to gain access to the personal information of tens of thousands of Coinbase users.
While neither of these hacks resulted in the theft of Bitcoin from Coinbase, they do serve as a reminder that even the most trusted exchanges are vulnerable to attack. So if you store your Bitcoin on Coinbase (or any other exchange), you should always take steps to protect your account.
The most important step you can take is to enable two-factor authentication (2FA) on your account. This will require you to enter a code from your phone whenever you try to log in or make a withdrawal from your account.
Even if a hacker manages to steal your password, they won’t be able to access your account without also having access to your phone.
You should also never store all of your Bitcoin in one place. If you have a significant amount of Bitcoin, spread it out across multiple wallets and exchanges.
That way, even if one wallet or exchange is compromised, you won’t lose everything.
Ultimately, there’s no guaranteed way to prevent your Bitcoin from being stolen. But by taking steps like enabling 2FA and spreading out your holdings, you can make it much harder for hackers to get their hands on your coins.