Introduction to Security Features For Crypto Exchange
It’s been 11 years since the launch of the first cryptocurrency Bitcoin, and since then thousands of cryptocurrencies have emerged and are thriving in the market.
The best way to make profits out of these thousands of cryptocurrencies is by exchanging them. For this reason, and many more, the majority of the entrepreneurs around the cryptosphere either want to be associated with cryptocurrency exchange platforms or create their own crypto exchange software.
One of the key attributes of cryptocurrencies is that they are decentralized. Although this brings in several advantages for the crypto or crypto exchange owners and users, cryptocurrency exchanges have also been prone to hack threats, online scams, theft of funds, etc.
This is why the other minority section around the crypto community is uncertain about investing in or getting started with a crypto exchange.
If you are intrigued to create and launch your own crypto exchange, it is crucial that you give the utmost consideration to the security standards of your exchange to avoid such threats for your business. What are some essential security features to be implemented for your exchange? Let’s find out further.
How to get a cryptocurrency wallet?
A cryptocurrency wallet acts as a normal wallet with tight security in place. The funds are protected by using private keys. A wallet (digital) can store ICO tokens, cryptocurrencies or any other digital assets.
Popular cryptocurrency wallets are –
Cryptocurrency can be operated via –
- Hardware( like ATM of cryptocurrency)
- Online Via cloud.
Among all popular wallets, MyEtherwallet(Mew) is the opensource wallet. It offers a friendly user interface, easy swapping between crypto to fiat and vice versa. It is available in Android and ios. Mew can be integrated with many other hardware wallets like- Trezor, Ledger etc.
Create a cryptocurrency wallet on MyEtherWallet(Mew) –
- Open myetherwallet.com in your browser.
- Navigate option New wallet
- Provide password.
- At this point, your Keystore file is ready to download once available, download it and store in a secure place.
- Save and install the private key.
- Once these are installed successfully, your wallet is ready to use.
- You require a private key to log in to your wallet to access your digital assets.
Ways to protect your digital assets
Password and Private key are confidential:
As the wallet works on Password and Private key, we need to make sure to keep this information secret. Beware of hacking, Phishing theft.
While choosing a password you can actually create a complex password. Try changing your password in every 90- 120 days.
Two-factor authentication is a must –
This is another layer of security on top of the password and private key. Two factors, authentication actually saves a user in case password and private key are compromised. It also protects the user from siphoning wallet balance.
Try to invest in multiple assets:
As the proverb goes “ do not put all eggs into the same basket”, Similarly crypto users must not focus on one segment of the market. One crypto user must diversify the assets to safeguard the funds during ups and downs of the market. Moreover, the diversification helps to minimize the risk.
Update the wallet software when available :
The wallet companies push patches for bug fixes, security update. New features addition etc. Wallet users need to update the client( wallet) regularly to avail the latest benefits.
Cryptocurrency is slowly gaining popularity as investments. Users can avail any wallet. The fundamental of wallet creation is the same but may differ in implementation due to various security systems. The cost of availing the wallet may also differ based on the features, security levels.
4 Best cryptocurrencies to watchout beyond 2020 –
- Monero (XMR) – XMR works on proof of work consensus mechanism( you can gain more coins by solving more mathematical problems) and uses advanced encryption technique. Monero is well connected with Binance, Coinbase and other merchants. Most importantly Blockchain App Factory also depends on Monero fork.
- Gold Secure Currency (GSX) – The GSX depends on gold production, and influenced by wytte mines in Zimbabwe. GSX holders are given evident. Land ownership rights, rights to avail mining equipment. Blockchain app factory also creates GSX.
- Tezos (XTZ) – XTZ follows the proof of stake (pos) consensus mechanism. A Tezos user validates a block or delegates the tokens to other users. Tezos offers robust security mechanism and protocol that actually safeguard the users from hacking or phishing. Tezox(XTZ) support creating a smart contract, apps, on-chain, off-chain entities. XTR ( Tezos) also provides excellent microservices, node setup, mobile wallet setup and operations.
- Cardano (ADA ) – The beauty of Cardano is that it will have its own blockchain network soon. The share price is growing slowly but steadily.
Potent security features to be integrated with your cryptocurrency exchange
Enabling registry lock brings in an additional layer of security for your crypto exchange. This feature helps to lock your domain name at the registry level, making it difficult or almost impossible for a hacker to access, modify, or erase your domain information, for example, registration details.
It blocks the name of several domain operations such as content modification, DNS server modification, domain transfer, etc.
The registry lock feature also comprises a three-way security passphrase between the registrant, the registrar, and the registry which ensures the utmost security to the exchange platform.
A cold wallet enables users to store their cryptocurrencies offline and access them without the Internet. Cold wallets help you to carry your cryptos around wherever you go and enable not just comfort, but also discreteness.
Even if your exchange is hacked or prone to any malicious activity, the crypto assets stored in the cold wallet remain unaffected and secure.
Cold wallets are integrated with multi-signatures and biometric authentication, therefore they provide added security to your crypto exchange platform.
Two-Factor authentication acts as a second layer of security for your cryptocurrency exchange software. This feature enables you to access the platform’s credentials or transaction information only after undergoing two levels of verification and passwords.
The passwords can be in the form of a mobile number, pin code, OTP, email verification code, fingerprint, etc. Enabling 2FA not only secures transactions that take place in your platform, but also the users’ accounts from unauthorized access, cyber-attacks, etc. Therefore, integrating 2FA is important to gain an additional layer of security for the exchange.
The data of a blockchain-based cryptocurrency exchange platform is generally end-to-end encrypted. Enabling this feature while executing your cryptocurrency exchange development makes it impossible for hackers to decrypt the data stored in your blockchain network.
The users’ and the transaction data will be stored in the form of private keys, public keys, and digital signatures. The name of the user and any other personal information will not be stored in the distributed ledger.
This feature is particularly integrated into a peer to peer crypto exchange system that enables exchanges between user to user.
Web Protocol Security
Web protocols are the most vulnerable to cyber-attacks. Therefore, it is very important that you ensure the security of your web protocols to prevent it from such attacks. To achieve that, the following are the key features to be integrated,
X-Frame Options– This feature prevents your content from being embedded into other websites and also prevents the exchange from click-jacking attacks.
X-XXX Protection- This prevents your exchange against cross-site scripting attacks.
HSTS( HTTP-Strict-Transport-Security)- This is to ensure that the browsing sessions follow HTTP Protocols.
CSP( Content-Security-Policy)- This feature helps prevent XSS attacks and determines which resources can be loaded and which are not.
DoS attacks target a network or a server and flood them with fake Internet trafficking to stop them from running smoothly. Many crypto exchange platforms face downtime issues because of these attacks.
Therefore it is essential to implement Anti-DDoS hardware and software modules such as network fireballs into your exchange to protect it from such attacks.
DNSSEC( Domain Name System Security Extensions) Integration
DNSSEC is a set of protocols that is used to authenticate all the DNS (Domain Name System) queries. It is a combination of both digital signatures and public keys that verifies and validates the data.
These protocols help avoid unauthorized DNS entries, users accessing websites that are harmful or prone to attacks, and other malicious attacks.
It is important to enabling multi-signature wallets into your exchange for users. The users have to provide multi security keys to be able to access or perform a transaction using the cryptos in the wallet.
Without a key, the funds cannot be withdrawn and every time a transaction takes place, a new alternative security key will be generated.
This prevents the theft of user funds providing a secure business experience for both the users and the platform owners.
To give an abstract of the most crucial security features to be implemented in your crypto exchange software,
- HTTPS Authentication
- Jail Login
- Encrypted Data
- CSRF (Cross-Site Request Forgery) Protection
- SSRF (Server-Side Request Forgery) Protection
- DoS (Anti-Denial of Service) Protection
- DDoS (Anti-Distributed Denial of Service) Protection
- HTTP Parameter Pollution Protection
- Escrow System
What is the best way to achieve the utmost security for your crypto exchange platform?
Integrating the best security practices for your cryptocurrency exchange is not an easy process. It involves a lot of intricacies and requires technical expertise.
To achieve the maximum security for your crypto exchange platform most efficiently, the wise choice is to hire a renowned cryptocurrency exchange development company.
Such companies will be composed of a wide team of highly experienced and qualified expert developers, programmers, etc., who will offer an exchange with all the above-mentioned security features, and maybe more.
Don’t hesitate to undergo extensive research to choose the right company, and to ensure a successful and sustainable future for your cryptocurrency exchange business.