There are several things you can do to ensure you’re using the best practices to avoid losing cryptocurrency.
Verify the Recipient’s Address
It can be time consuming to look at every individual character every time you send cryptocurrency. Instead, a common technique is to look at the first and final 4 characters on the address. This can be a simple way to verify addresses quickly whenever you make a transaction.
Use the Copy Feature
Whenever you’re sending cryptocurrency, there will normally be an icon of a clipboard next to the address. Clicking this will copy the address to your computer’s clipboard.
Doing this removes the need to type or copy the address manually. This could result in only highlighting some of the address and increasing the chances of a typo—which would result in you losing your cryptocurrency.
As discussed previously, there are risks associated with copying an address to clipboard. Therefore, be sure to double-check your addresses before confirming a transaction.
Send a Small Test Amount for New Addresses
When you make a new address or send to an address for the first time, it can be useful to send a small test amount first.
For example, Katie has bought 5 ether (ETH) on an exchange. She wants to send her 5 ETH to her Ledger Nano S wallet. To ensure the address is correct and everything is working fine, Katie firstly sends a tiny fraction of her 5 ETH.
After her transaction is confirmed and the funds appear in her wallet she knows the address is okay to use. So, Katie proceeds to send the remaining ETH.
This is useful whenever you create an address for the first time and/or you’re transferring a substantial amount of cryptocurrency.
Ensure Your Connection Is Secure
As discussed previously, phishing attacks—that is, cybercriminals setting up near-identical copies of exchange websites and other websites which involve you entering sensitive information—are a real problem in the crypto space. Whenever you’re using a web browser to send or receive cryptocurrency, look for the lock symbol to ensure your connection is secure.
Your connection is insecure—and almost certainly a phishing attack—if the URL is suspicious in any way. That is, the URL may be the same as the usual URL except for the subdomain or the position of a single letter or number. For example, a fake CoinSpot website might look like ‘www.coinspot1.com.au’ or ‘www.coinsspot.com.au’.
If you go to send cryptocurrency and your login isn’t secure, close the tab immediately and visit the legitimate website.
You can avoid all this stress by getting into the habit of bookmarking your important websites. When you need to visit these websites, it means you don’t have to Google them and risk landing on a phishing copy of the website. Instead, you can just click through to the legitimate website by navigating via your bookmarks folder in your web browser.
Only Use Trusted Platforms
There are scammers out there who will try to get you to send them cryptocurrency. This could be an ICO who asks you to directly send them cryptocurrency in return for their ICO tokens.
Never send cryptocurrency to untrusted exchanges or platforms who have no reputation. Well-managed exchanges and platforms have a reputation or feedback system you can verify before sending your cryptocurrency.