KYC (Know Your Cyber-enemy) Rules for Bitcoin
Trading Bitcoin requires about the same set of skills and knowledge as trading anything else. Following market trends, understanding technicalities and emotions, exercising patience, complying with the AML and “Know Your Customer” rules.
Here are some 3 simple Know Your Cyber-Enemy rules for trading bitcoin. Follow them to avoid headaches of loosing bitcoins.
Rule Nr #1 : Limit The Digital Risk
Ever since the invention of the computer and internet, the bitcoin, or the private key used to manage bitcoins to be more precise, is the first “file” with intrinsic value stored directly on our personal computers, mobile phones, the servers of exchange and trading websites.
To the disadvantage of a bitcoin owner, any devices with internet connectivity were primarily designed to share files, not to protect them. Any device that can get online is at risk of being hacked.
With the price of around 250 USD/BTC (at the time of writing) obviously, your bitcoin wallet on your computer, mobile phone or the servers of your bitcoin exchange are the prime target of many hackers.
Yet most of us, average computer users, dont know how to prevent viruses and bad actor attacks.
So how can you possibly achieve a security for you and your clients if big corporations and bitcoin companies fail to?
Bitcoin wallet stealing malware
According to the Kaspersky Lab research, almost 6.000.000 attempts of bitcoin wallet stealing viruses to swipe bitcoins from computers. If Kaspersky Lab only has around 3.3% market share, we might estimate up to 200 million virus attacks to steal bitcoins in one year.
Every single day we see around 230 new keyloggers going online. Keyloggers are programs designed to record all you type, including your passwords to your bitcoin wallets. Dell SecureWorks reported that computers with an installed anti-virus software only detect around 50% of those attacks.
Most of our computers and mobile phones are compromised when you open the box. That being said, setting up your bitcoin wallet on the device is never a 100% secure way to go.
False sense of security
Dont fall into a dreamy state of feeling secure if you are using a strong password, 2 factor authentication through your email or biometrics. One good example is recent JP Morgans 2fa hack.
Rule Nr #2 : Avoid Third Party Trust
Maybe youve heard some of many sad stories of people losing bitcoins on errors, theft and fraud.
http://satoshilabs.com/news/bitcoin-thefts/ . The Golden rule in Bitcoin world is : If you do not hold your private keys, you do not own your Bitcoins!
Rule Nr #3: Act responsibly, Beware of Scammers
If you like to experiment, do it. Just be aware, that as in any business, there are people and companies in Bitcoin trying to act trustworthy, announcing new projects or products just in order to run away with your investment.
So before you buy into the new great deal with a big cash, learn as much as possible about the people behind the project, ask the community to confirm the legitimacy and share your experience.
The best places to go for community advise are reddit.com/r/bitcoin or bitcointalk.org. But above all, use your common sense.
Solution to computer vulnerability
The lesson we at SatoshiLabs learned on our own skin
and incorporated into TREZOR the bitcoin hardware wallet is that “the private keys should always stay away from any online device”.
Today, that is the only chance for a bitcoin owner with average computer skills to face online thieves.
Well, dont get discouraged, know your cyber enemies and get ready so that you can trade with a peace of mind.