With the efficiencies of decentralization and the promise of secure transactions, crypto currencies are gaining traction in our digital world. Despite the ease and difficulty of forging cryptocurrency transactions, organizations dealing with it still need to take security precautions.
A reduction in processing fees and an expedited transfer of funds is achieved by eliminating the central authority. Still, digital cryptocurrency balances are in danger of being wiped out by computer crashes, hacks, and other unforeseen events without a central repository.
A cryptographic key and seed must be created securely in order to operate a cryptocurrency. Pay special attention to confidentiality and unguessable numbers when examining your organization’s security measures. New keys and seeds are kept confidential so that they will not be obtained by an unintended party. In this way, unintended actors can’t impersonate the intended key holder.
Use of wallets/keys
It is also important to maintain the integrity of cryptocurrency or online Bitcoin wallet and its key. The following best practices can reduce the risk of keys being lost or stolen and the risk of the wallet holder’s identity being disclosed unintentionally:
- Every transaction should have a unique address
- Spending money from the wallet requires a minimum of two signatures
- Keys/seeds should only be used in trusted environments
- Making sure all key-holders and seed-holders have valid identification, references, and backgrounds
- In order to facilitate recovery, redundancy keys are assigned to each wallet
- The storage of keys that have different levels of signing authority.
Access to crypto information and the ability to act must be controlled by the organization. The roles and procedures for keyholders need rigorous training. Aside from proper onboarding, you should also have protocols in place to revoke privileges when a staff member leaves the company. Security can be improved by using “least privilege principles,” in which users are given the bare minimum permissions needed to carry out their functions and no more to the cryptocurrency information system.
A company must protect its cryptocurrency private keys similarly to how it would a bank vault key. Where necessary, physical locks and encryption should be used to safeguard the information. It is also important to keep backup keys/seeds protected from environmental risks (in paper, digital, or other form).
Assessing the situation
No Your organization’s information system was built by people who are not technically skilled, knowledgeable, or experienced. However, even the best heart doctor would consult another expert in order to get an objective diagnosis. You might overlook cryptocurrency flaws that might be overlooked or underestimated by your staff if you invite an outside expert to identify risks and control deficiencies.
The following are other considerations
The key compromise policy also needs to be in place. In the event that a cryptographic key/seed or the holder is compromised, there must be a process in place that dictates what action must be taken.
As well as sanitizing data, a policy must be in place. You need to make sure your staff understands the risks associated with data that persists on digital media even after deletion. Provide trained employees access to tools that perform secure data deletion on decommissioned devices such as servers, hard drives, and removable storage.
Additionally, crypto-related organizations must establish regular proofs of reserve funds for compliance purposes. It is also very useful to analyze audit logs to determine how unexpected security incidents occurred in order to resolve any inconsistencies faster and return the system to a consistent state.