Keeping Your TON Cryptocurrency Safe
Keeping Your TON Cryptocurrency Safe
TON Daily Dose: 2022-05-04
Where is the safest place to store Toncoins, and indeed any crypto?
Well, let's figure out how to secure your coins.
Storage method #1: crypto exchanges.
Beginners usually keep their coins on the balance of exchanges such as OKX, but this is a mistake, you should withdraw them when not using the exchange, because you are at risk:
First of all, these coins are not yours. They actually lie in the crypto exchange wallet, and they draw balance numbers for you in your personal account. Those are just numbers on the screen. If they want to block, they will block, as Coinbase has already done for 25,000 Russians.
Secondly, exchanges are subject to hacking, and even such a giant as Binance has been hacked, let alone smaller exchanges.
Furthermore, if you face any problems, they may take weeks to fix them, meanwhile your coin are all frozen because of some other scammer.
We have covered many of these problems in previous issues of TON Daily Dose.
We may even come up with unkind names, perhaps apt, for these exchanges: “OK, ex!” — Conex or Excon! — Byenance! — F that Xchange! — etc.
Therefore, we store coins on exchanges only for momentary tasks: for quick and cheap exchange, and for trading. And only if necessary. You are really risking them the moment they leave your own custody onto the exchange.
Method #2: custodial wallets.
Typical custodial wallets are @TonRocketBot, @cryptobot and @wallet when talking about TON. Or a CoinBase wallet, for example.
This is about the same as storing on the stock exchange - yes, it’s convenient. Yes, within the ecosystem, no commissions. Yes, many cryptocurrencies are supported. But the risks are the same: these coins are in the purse of the custodian, and they just show you the numbers on the screen.
Very convenient and suitable for keeping the amounts that you may need to use making and receiving payments in Telegram, think of it as your actual wallet in real life, where you keep enough cash as necessary.
Cryptobot provides a nice Exchange and Market for buying and selling your crypto, in the event of any problem it is sorted out very fast, unlike the major exchanges such as OKX.
Not suitable for long term storage.
Method number 3. Non-custodial wallets.
Although they’re usually called “non-custodial” another way to put it would be “self-custodial” wallets. In fact, this is just an interface program that connects a person with the blockchain.
The bottom line: non-custodial wallets do not store your private key and have no power over your coins.
If someone wants to hack your self-custodial wallet, then the "hacker" has only one way: he must somehow find out your seed phrase: 24 words written in a certain order. Or trick you into using a fake online TON web wallet site.
If you keep this phrase on a piece of paper in a safe place and do not surf porn-phishing sites, then how can he find out this phrase?
Therefore, non-custodial wallets are ideal for storing crypto, because no living soul except you has access to them. Though you should make arrangements for loved ones to have access in case of your demise, for example.
But there is a minus: if the seed-phrase (24 words) is gone, that’s it, access to the coins is lost forever, because there is no "forgot password" button in the blockchain world. Therefore, it is usually recommended to write it down on two pieces of paper and hide them in safe places.
If storing a lot of money for longer term, some even etch them into metal.
The best example of a self-custodial (non-custodial) wallets is TonSafe.
Method number 4. Hardware wallet.
This is the safest storage method. When working with non-custodial, there is one problem: your phone or laptop, where your wallet is open, for example, is constantly online.
If you trust Microsoft Windows or Google Android, good for you, we don’t. Apple iPhone and Apple Mac is a different story, I consider those safe. We even run extra firewalls to verify their safety. Out of the box, there’s little chance of intrusion.
But there is always a chance for anything that is connected online, especially if you are a target and there is a powerful or smart adversary. Smart phones are generally much smarter than their “owners”!
And, when you create a new wallet, your seed phrase is generated online, and there is a theoretical (very low, in fact) possibility that this phrase will somehow be stolen from you, even though via encrypted connection.
Or, say, you will be driven to a phishing site, where, you yourself will type a secret phrase. Recently the wallet.ton.org site was also at wallet-ton.org by such a bad actor who stole much TON coin from many users. Everything looked identical.
Anyone creating their wallet there, lost their money soon after. In our opinion, using a web site wallet is not a good idea at all. The TON Foundation could put additional security features into place in that regard, but haven’t as yet.
Users who lose their money are also not as yet assisted or protected by any group, to retrieve their money, which can be done if the exchanges and law enforcement get involved. We’d like to see Ton Foundation active on this front.
So, a hardware wallet is such a thing like a USB flash drive that is always offline, that is, the above risks do not concern it.
The private key is generated offline and stays offline forever, which means that your crypto is 100% secure.
Until now there is no easy way to use popular hardware wallets with TON but that is expected to change. You can do some research into hardware cold wallets.
Outcome:
Large amounts of tokens (and other crypto) we store only in non-custodial (self-custodial) wallets, without exception.
And we don’t rummage around suspicious porn sites so as not to catch a virus!
Once again: it’s almost impossible to hack a non-custodial wallet, this is usually achieved through “social engineering” - when scammers swindle you into telling them about yourself, your secret 24 word pass phrase, which you should NEVER disclose to anyone you don’t want to give full and immediate ownership and control of your wallet to.
Well, if the amount is really large, then the hardware wallet may help you, or the paper cold wallet, if you do some research into this, though it is quite involved.
There is also a method to use a second mobile phone which isn’t connected to the Internet, as a hardware wallet, again this may become easier in future.
Meanwhile, a practical solution for most people to store larger amounts of TON coin is to create the wallets on a secure computer, ideally an iOS or MacOS or Linux operating system, or a secure browser (no third party browser!) such as Safari, on a secure connection, at different times and ways, and divide funds between those wallets.
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