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In 2016, the Decentralized Autonomous Organization (was there only one?) was robbed of more than $60 million of digital money through code exploitation and hacking. Since then, mainstream media has made crypto seem like a security risk and liability – often citing incidents like these to remind people of how “code” can be as vulnerable to human greed and mistakes as paper bills.
With blockchain gaming allowing players to use their in-game items and experience to earn cryptocurrency via a play-to-earn model, the call for a more secure and safe experience has become a key point for DAOs and gaming guilds to focus on.
On a personal level, an utter reliance on external organizations to secure your funds is just as dangerous. Keeping all your gaming funds and profits in one ecosystem will risk losing all of them.
There are steps that you can take to ensure the safety of your hard work. Here’s a breakdown of how you can keep your gaming profits secure.
Why Should You Listen to Me?
Hi, my name is Matthew Du – and I’m one of the world’s top crypto hackers…
Just kidding! I’m not – but I have learned a thing or two about crypto and blockchain gaming since I started in this field in 2017.
I’ve tried it all: cold wallets, hot wallets, hard wallets, soft wallets – you name it! It’s a lot to take in, especially for someone just starting in the field.
If you recently got into the world of blockchain and looking at Play-To-Earn models for some extra dough, then this article is perfect for you. It’ll help you build a multi-layered system of protection against cyber threats like hackers and phishing attacks.
Suppose you have some experience and a set system for how you want to keep your funds; no problem! You could skip to the reminders as I cover leading practices on how to double down your security system. Skim the rest of the article to get the most out of your time.
Bottom Line Up Front
To maximize the security of your gaming profits, you’ll want to use a hardware cold wallet. A hardware wallet does the verification within the device. Minimizing your exposed data limits the vulnerabilities that hackers and scammers could exploit. However, hardware wallets are inconvenient.
Most crypto users will use a combination of software and hardware wallets to store their funds. While most of their funds will be in hardware, software wallets offer an unmatched level of convenience and accessibility. A combination of all wallets is necessary to live a truly bankless life.
Security is also a question of habits, routines, and practices that safe-keep your funds. VPNs, secure internet networks, and multiple authentication factors are just some of the most common ways to keep your gaming profits secure.
What Is Crypto Security?
Before we begin, I want to talk a little about Crypto Security. The main selling point of cryptocurrency is the blockchain. Its claim to fame is that it helps in the verification and traceability of multistep transactions; it provides secure transactions and speeds up the data transfer process.
Crypto security is more than just the blockchain. It involves using layers of encryption systems, ciphers, and codes, to prevent interception, decryption, and tampering.
On a personal level, it’s the act of storing your coins on different databases and wallets, protected by two-factor authentication systems and multiple signatures. For this, you will have to understand the use of public and private keys alongside crypto wallets to identify the best practices for the security of cryptocurrency.
The Public key is the code that a person can share to identify the holder before transferring assets. Your public key is much like a mailing address; anyone can look it up and send things to that address – it’s how you receive crypto from others.
A private key is used to verify transactions and prove ownership of a blockchain address. Your private key is unique to you, the crypto holder, and is used to “unlock” their cryptocurrency on the blockchain. Because private keys are numerical codes and challenging to remember, many wallet providers will instead use a “seed phrase” to unlock their wallets. Seed phrases are a string of random words that you use to unlock your funds. Your private key is hidden within these words like a secret code.
A crypto wallet is where you will store your cryptocurrencies. It will have a public key that you can share with other people so they can send cryptocurrency to you and a private key for your personal access. Different crypto wallets will have different levels of encryption and security. Some are more accessible and convenient than others but will sacrifice safety in return. You must understand the different types of crypto wallets and how they interact with one another.
Crypto security is a top priority for multi-million dollar corporations – I don’t see why it shouldn’t be a top priority for us.
Why You Shouldn’t Store Your Crypto In-Game?
Aside from the obvious security problem of holding your crypto in-game, keeping your gaming profits (without exchanging them for another cryptocurrency) is not an intelligent long-term investment decision.
The problem is that in most of these blockchain games, more coins are being minted than burned daily. This means that the market cap has to increase for the price to remain the same consistently. In short, you need more money to retain the prices.
How Is That a Good Investment?
For retaining gaming currencies to make sense financially, you’ll need to find a game with tokenomics that burn more crypto than what it mints. Exchange your profits for better coins and store them elsewhere.
Where To Store Your Gaming Profits?
To secure your gaming profits, you should first figure out where to store your cryptocurrency. Aside from leaving it in-game because, let’s face it, who would want to do that? Here are all the available options at the moment and my experience in dealing with them:
Crypto exchanges are platforms where gamers can buy, sell, and trade cryptocurrency. Crypto exchanges work in the same way the stock market exchanges do – you can use an exchange to trade one crypto for another or buy crypto using fiat currencies like the U.S. Dollar.
To do this, you’ll also need funds within the exchange.
Unfortunately, crypto exchanges are not the most secure place to store your funds. If you’re serious about getting into cryptocurrency, you should look to hold both the public and private keys associated with your holdings.
While keeping your funds in an exchange is convenient and accessible, many believers hold the adage, “not your keys, not your coins.” Quite frankly, the lack of regulation in the industry worries me enough to move most of my holdings into secured wallets (or at least, the ones I don’t plan to trade).
Nonetheless, crypto exchanges remain necessary in the ecosystem. They allow transactions to push through and provide relevant information pertaining to the trends within the market.
Here are some of my recommended crypto exchanges:
- Coinbase: Coinbase is an online exchange for buying, selling, transferring, and even storing digital currency. Founded in 2012, the company has over 56 million users across 100 countries globally, making it one of the largest crypto exchanges to date. Keeping your money within this fund will grant you access to over 150 cryptocurrencies, though looking for small market cap coins may be difficult. In my experience, Coinbase with a Yubikey (or other quality Fido2 keys) for two-factor authentication is quite secure.
- Binance: If you’re outside the U.S., chances are Binance will be your exchange of choice. Despite having a steeper learning curve, Binance has a better offering for advanced traders with comprehensive charting options as well as lower fees. With over 600 cryptocurrencies supported on the platform, it’s clearly the better option for someone living outside the U.S. My personal experience with Binance is one rooted in trading. The variety of transaction types supported on the platform allow me to capitalize on a multitude of market events. I love the capability of being able to place limit orders and margin trade. It’s definitely a more complete trading experience in comparison to other exchanges.
Software wallets are one of the two popular types of wallets you can use; the other being hard wallets which we’ll discuss later on.
Software wallets are cryptocurrency accounts that hold your crypto through desktop, mobile, or web apps. Some software wallets even have browser extensions that provide convenience and ease of access to their users.
Unfortunately, having software wallets available on the browser means that they’re connected to the internet, creating a vulnerability that hackers might get into. Being connected to the internet also means that software wallets are “hot wallets”. On top of this, some software wallets are only compatible with choice coins – you’ll have to check the whitepaper to see which coins they’re compatible with.
The primary advantage of software wallets is that they provide convenient and easy access to your funds. Software wallets can connect to online sources and serve as a payment method. Because they’re always online, there’s no need to transfer your cryptocurrency from an offline vault to an online wallet – making it an accessible option for most users.
Software wallets are also generally non-custodial. This means that the organization has no access to a user’s private keys, making it a much safer option when compared to funds in crypto exchanges.
Users who hold large amounts of cryptocurrency generally won’t keep significant amounts of crypto in software wallets. Most well-respected crypto “whales” (they’re the guys with a lot of money) will keep the majority of their funds in different cold hardwallets for safekeeping. They simply transfer funds into their software wallets when the need arises.
Here are some of my recommended software wallets:
- MetaMask: Metamask is one of the most widely used software wallets given that it has more ways to access its services in comparison to its competitors. The browser app is extremely helpful and convenient if you’re looking to have cryptocurrency set as a payment method. Allowing you to send, swap, or receive tokens through the wallet, Metamask mainly supports all the Ethereum-based network and Bitcoin. I think MetaMask is an absolute must-have for someone looking to get into crypto and live a bankless life as their payment methods span nearly everything from Wyre to a bank card and Apple Pay. For gaming, most of the popular NFT games are compatible with this wallet. This is the software of choice for all my friends into games like Axie Infinity, My Crypto Heroes, and the ETH version of Crypto Dynasty. ETH-based games like ZED Run and Sorare are also obviously supported.
- Exodus: If you’re looking to pay using cryptocurrencies outside the Ethereum network, then Exodus will likely be your wallet of choice. It’s simple interface great for end users with compatibility to over 150 cryptocurrencies and all ERC-20 tokens. Between the two, I think the biggest difference they have can be found in their transaction fees. On Exodus, the fees are limited to miner and network fees. On Metamask, the fees will always range around 0.3%-0.875%. However, Metamask is more flexible in that they allow users to choose the network with lower fees. Unfortunately, Metamask only services Ethereum-based coins and Bitcoin whereas Exodus has a much wider array of options.
- Coinbase Wallet: If you already have a Coinbase account, chances are you also have a Coinbase wallet! The Coinbase wallet is compatible with most protocols if you’re not particular. It’s quite a universal wallet that grants you access to pretty much any game out there – though some cases will call for a wallet-to-wallet transfer. If you’re the type to play Gods Unchained or CryptoKitties however, then this could very well be your wallet of choice.
Hardware Wallets are physical devices that record your private key and store cryptocurrency. Because they’re not connected to the internet, these are what we call “cold wallets.” Typically, hardware wallets come in small to medium-sized USB sticks.
Because they’re offline, hardware wallets are designed to be immune to hacking. The private keys are stored internally, so even when the hardware wallet is plugged or connected to your computer, funds will be impossible to steal, given that the transaction is all done in-device.
These benefits don’t come without a cost, however, as hardware wallets are considerably less convenient than all other options. To access your funds, you’ll need to power them on, plug them into your computer via a cable or Bluetooth, and then connect to the internet.
There’s also the consideration of cost. Software wallets are usually free. Because of the cost of materials to manufacture the products, hardware wallets will set you back between $50 and $200, depending on the make and model you choose.
Here are some of my recommended hardware wallets:
- Ledger Nano S: The Ledger Nano S has always been the gold standard for hardware wallets ever since it’s come out. Because of its design, it’s easy to hide (and maybe lose if you’re not careful).
- Trezor Model T: The Trezor Model T supports around 1,000 crypto assets with a touchscreen user interface to provide easier setup. Unfortunately, all this comes in a bulkier and pricier design despite offering relatively the same level of security as a Ledger Nano S. While you could only connect to the wallet via USB, I find that this is a much better option for holding the gaming profits that I don’t plan to trade or burn anytime soon. As a side note, it doesn’t matter which games you play because it is very likely that any hardware wallet is compatible with the protocol you work with anyway. Plus, as I mentioned before, once the funds reach your hardware wallet for safekeeping, they should be in a better-founded coin.
Picking The Storage Device For You – Selection Criteria
With so many options to pick from, how do you make a decision on which storage device to pick?
I use three vital facets to make that decision:
- Liquidity: how often will you need to access the funds in your wallet?
- Upfront Cost: do you have the capital to spend on a more secure wallet?
- Security measures: what makes some wallets more secure than others?
I think once we consider these 3 factors, the right storage device to pick will just reveal itself to you. It might be the case that you’ll need a combination of all 3 wallets, which is what most serious crypto hodlers do anyway.
Here’s a small chart to help you make the smarter decision on which wallet to get first.
|Crypto Exchanges||Software Wallet||Hardware Wallet|
When I first started blockchain gaming, the first wallet I got was MetaMask. I was big into Axie Infinity then, and MetaMask was more than enough to meet my needs. I already had a Binance account for my trading, so it was simply a matter of committing trading arbitrage to get the coins I want.
How To Keep Gaming Profits Secure
The exact process to move a fund from a game into a wallet will differ based on the network and game you choose.
Generally, this is what the process would look like:
1. Claim Your Money.
The exact process of withdrawing funds will be different between games. Make sure to check out the specifics of the game you’re playing. This will transfer your money to a software wallet like MetaMask or Exodus.
2. Convert the coin to BNB or whatever coin the blockchain network of your game supports.
Converting the coin is a vital step because, as we mentioned before, it would be difficult to justify holding a coin unless the coin is burned more than minted. This, unfortunately, is not the case majority of the time
3. From here, you can Either:
- Go to a crypto exchange, deposit the funds from MetaMask into the exchange and convert the values into whatever coin you wish
- Transfer the coin directly to a hard wallet from a software wallet.
For example, here’s how you would do it in a popular games like ThetanArena:
4. Proceed to the Marketplace for Thetan Arena
5. Input your Metamask Address.
5. Click on “Claim” for Thetan Arena. You should see your funds show up on MetaMask.
6. On your MetaMask account, Convert THC to BNB through the “Swap” Function.
7. Open Your Binance Account.
8. Open “Fiat and Spot”
9. Search for BNB and copy the Network Address (Make sure it’s set to BEP20)
10. Plug this Into your Metamask and Send Your Tokens.
11. Your funds are now in Binance and ready to be traded or sent directly to your bank account for fiat currency.
Reminders To Double Down on Safety
You’ve picked a wallet to store your gaming profits. Great.
But have you taken the extra precautions to make sure it’s secure? Here’s what you can do about that.
Use One Device
You’re only as strong as your weakest link.
Using multiple devices is the one mistake that I see beginners make over and over. They log into all their cryptocurrency accounts from more than one device. Having one device will prevent any potential leaks from leaving your device open.
As you’ll see later on, there are added security measures that your crypto laptop should have. Measures like a strong antivirus, a secured VPN, and two-factor authentication are tedious and often expensive to implement on multiple devices.
Limit your security vulnerabilities by only accessing your cryptocurrency through one device.
Enable 2 Factor Authentication
I ALWAYS enable Two-Factor Authentication on all my accounts, whether it’s to my email, social media, messaging apps, and of course, crypto wallets.
To log in to any account I have, I’ll need something I know (like a password) and something I already have access to (like your phone number or email). It’s just an added layer of security that might be a little inconvenient but a definite must when our whole lives are available on the internet.
Storing Your Seed Phrase
Your seed phrase is your lifeblood. Without it, you can’t access your crypto, and you will lose all your money. If someone else has it, they can take all your money, and you can’t do anything about it. Such is the life of decentralized finance.
Storing your seed phrase is extremely important, and here’s how to do it:
- Keep A Secured Copy: I have a physical vault at home to keep all my essentials. Yes, this includes a notebook with all my seed phrases. If you want to take it to the next level, you can memorize the end of your seed phrase and then erase this portion from the physical copy.
- Using A Password-Manager: For all my non-crypto-related passwords, I use Bitwarden. A free password manager offers encryption services to generate, store, and automatically fill passwords across all devices. I don’t particularly appreciate keeping copies of my seed phrase on the internet for fear of a data breach. Still, many other crypto-enthusiasts love this option as they get peace of mind that their password is not only on a secure network but also protected from physical damage.
Use Secure Internet
Who wants to have their passwords and data stolen? Not me. That’s why I avoid Public Wi-Fi like the plague and always use a VPN. I stay away from suspicious sites while on my crypto laptop and double-check my internet security before logging on to all my accounts. You can do this by testing your firewall for weaknesses, downloading an antivirus, and using WPA2 for your Wi-Fi key.
Doing simple things like creating a strong password for my router, enabling network encryption, and ensuring that my router software is up to date are specific things anyone can do to boost their network security.
Download A VPN
A VPN isn’t usually something an average person would have casually downloaded on their network. However, a crypto enthusiast is on the bleeding edge of one of the most financially disruptive technologies to have blessed planet Earth; a VPN seems like such a small step to make when you put it that way.b
A good privacy-oriented VPN service helps you protect your identity from third-party tracking, whether a hacker, a government agency or even your family. The core ideology here is leaving no digital footprint – no one can steal your money, cryptocurrency, or data if they don’t know who or where you are.
I use NordVPN simply because it’s the world’s leading VPN service with a strict no-logs policy to prevent tracking, collecting, or even sharing your data. NordVPN also offers network encryption and I.P. masking to help protect you against hackers.
I’m not affiliated with NordVPN; there’s no money in this for me. I just like using the software.
Use Common Sense
No matter how many security protocols you implement, there’s only so much these can do to protect you if you continue to be gullible. Be aware of the common scams going around. Don’t connect your software wallets to just any platform. Don’t go investing in projects without doing immense amounts of research beforehand.
There are tons of resources to read up about common cryptocurrency scams and malware; I love going on Reddit and just reading up on the different scams that people can come up with. It’s not only educational but also vastly entertaining.
You don’t have to be a genius to stay away from scams. You need to know where to look.
Question: How Safe is A Blockchain Wallet
Answer: A blockchain wallet is a storage system that allows users to manage and hold different kinds of cryptocurrencies. The security of your cryptocurrency depends on the type of blockchain wallet you use. There are three main types of wallets arranged ascendingly according to how secure they are: an exchange wallet, a software wallet, and a hardware wallet.
If you’re looking for the safest option, go for a hardware wallet. They’re less likely to be breached, given that they do the verification process within the device and have fewer connection methods than other wallet types. If you’re looking for more convenient options, you’ll likely opt for an exchange wallet or software wallets, which can easily connect to third-party applications and serve as payment methods.
Each type could be further subdivided into “cold” and “hot” wallets – cold wallets don’t have internet access, while hot wallets do. Cold wallets are more secure than their counterpart because they provide fewer vulnerabilities.
Question: How To Protect My Cryptocurrencies
Answer: The power of cryptocurrency is decentralization. This means that the question of security falls entirely into your hands.
Protecting your cryptocurrencies involves implementing rigid protocols that minimize your exposure and vulnerability to intruders. Using two-factor authentication, securing your internet, and having a VPN are some examples of many.
Question: Which blockchain is best for gaming?
Answer: There is no clear answer to this.
The best blockchain for gaming is the one that supports the best game. ERC-20 and BEP-20 tokens are popular because they are accessible with a wide range of applications. APE, SAND, and MANA are all examples of blockchain gaming coins built on these networks.
Securing your gaming profits involves picking your storage method, transferring your funds, and implementing safety protocols and practices to protect you from hackers and being scammed.
The most significant source of protection, however, is common sense. Be aware of common scams and hacking practices, and avoid anything that comes off as dubious. Learn from the mistakes of others and always, always use your head. Cryptocurrency is a growing space with a reach far exceeding any financial system that exists today. Some people will look to take advantage of that.
Decentralization means that no one is responsible for your account security other than yourself. When you put it that way, installing an extra security feature doesn’t seem so pointless now.
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