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How To Keep Your IOTA Cryptocurrency, MIOTA, Safe

IOTA, a cryptocurrency platform for the internet of things ecosystem, recently got into trouble after hackers stole passwords for users’ wallets and scampered off with $4 million worth of coins. The theft grabbed headlines and critics were quick to pounce on IOTA and call it “a horrible, horrible, terrible cryptocurrency” for failing to protect users against such attacks. .

However, this criticism misses the important fact that IOTA itself was not compromised. Public nodes in its network were subjected to a distributed denial of service (DDoS) attack by hackers, who had previously stolen user credentials through phishing.

“We have repeatedly reminded users to keep their passwords safe and generate them locally – distributed ledgers are decentralized and immutable and users are responsible for safekeeping their own financial assets,” said David Sønstebø, co-founder of IOTA.

In response to the attack, IOTA published a blog post informing users of their responsibilities when buying and transacting with cryptocurrency. The IOTA Foundation has also set up an online community called Discord IOTA where cryptocurrency users can seek help from others and members of the IOTA support team.

Here are some steps users can take to protect their IOTA.

1. Generate a strong seed

Bitcoin generates a private key for users. IOTA is different. It requires users to generate their own “seed”, the cryptocurrency equivalent of a private key.

IOTA seeds are alphanumeric combinations of 81 characters.The IOTA seed must be random. This means it must have a mixture of random characters which makes it difficult to guess the seed.

IOTA users have the choice of generating their own seeds or using a tool for the task. The previously described theft was committed using an online phishing site, which posed as a place for generating IOTA seeds. Therefore, the team behind IOTA does not recommend using online seed generators.

Users can also generate new seeds using the following commands on Linux and Mac OSX:

  • cat /dev/urandom |tr -dc A-Z9|head -c${1:-81} (Linux)
  • cat /dev/urandom |LC_ALL=C tr -dc ‘A-Z9’ | fold -w 81 | head -n 1 (Mac)

2. Change the seed

The IOTA Foundation recommends that you copy the seed to an online password database, such as KeePass. When copying the seed to the database, you must randomly change 10 letters in the key before saving it. The idea is to make your seed really random and hard to guess and to make sure it’s only your responsibility.

“After following these steps, you can be 100% sure, or as close as technically possible, that your seed is random enough and that you are the only person who has ever had access to your seed,” writes the IOTA team. .

3. Store the seed

After generating a strong seed and saving it, you need to store it. Storage options for IOTA seeds are similar to bitcoin. You can store the seeds in cold storage (or offline) or you can store them on encrypted disks.

If you prefer to do the former, it’s a good idea to take a printout from your personal (not public) computer and keep the printed copy locked up, either in a public safe or at home.

If you plan to store your seed on a disk, make sure it is encrypted and requires passwords for login. The same goes for online password databases or password managers.

The basic idea behind this strategy is to multiply the number of encryptions that protect your seed. This will make it difficult for hackers to access your seed. You should also never leave your hardware disks lying around or entrust them to people you don’t know.

The essential

The theft of IOTA cryptocurrency from public nodes has raised concerns about its security among users. However, with careful planning and safekeeping, users can keep their IOTA safe and secure from the prying code of hackers.

Investing in cryptocurrencies and other initial coin offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the author to invest in cryptocurrencies or other ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decision. Investopedia makes no representations or warranties as to the accuracy or timeliness of any information contained herein.

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