Complete Guide on How to Keep your Crypto Safe
Looking for the best answer to how to keep your crypto safe? Here’s a breakdown of the various types of crypto storage and ways to keep it safe.
Crypto account hacking is on the rise, as we all know. Due to the popularity and price rises of Bitcoin and Ethereum, virtual currencies are frequently a target for hackers looking to profit from these valuable assets.
When an investor’s crypto account is hacked, they have no legal recourse as the virtual coins are not yet controlled by a government or central bank. Thus, people go for various methods to protect their coins.
Key Points
Here are a few pointers to keep your crypto safe:
- The major part of your cryptocurrency should be kept in a cold wallet because it is the safest option.
- For smaller amounts of cryptocurrency that you want to trade, use a hot wallet.
- Write down your recovery phrases for your cryptocurrency wallets, there are steel tools designed specifically for recording crypto recovery phrases.
- Save recovery phrases in a safe place that only you have access to.
- Never give anyone your crypto wallet’s recovery phrase or private keys, and never save them to your computer.
Popular Method to Keep your Crypto Safe
Using crypto wallets is a common way to keep your cryptocurrency safe. You’ll need it to store your cryptocurrency. Hardware wallets and custodial wallets are two of the safest ways to store your cryptocurrency, but each has pros and cons. Some cryptocurrency users have a strong bias for one over the other. However, you can use different wallets depending on your priorities.
What Are Crypto Wallets?
A crypto wallet has a private key that you can use to approve a crypto transaction. Although cryptos are stored on a blockchain rather than in a wallet, you must use a wallet to purchase, spend, or trade your crypto.
You can use a variety of wallets, including:
Hardware Wallet
A physical storage medium for the private key. It might just be a piece of paper or metal with the key written on it (these are also called paper wallets and metal wallets). Hardware wallets are also available that can connect to your other devices via Bluetooth, USB, or an app and store crypto.
Software Wallet
Software wallets can be desktop, mobile, web applications or browser extensions. Depending on the cryptocurrency you want to trade, you might need to use particular software wallets because they may have different features and capabilities.
Custodial Wallet
These wallets are managed by cryptocurrency exchanges and allow users to easily store cryptocurrency on them. You will create and log into an account to use your cryptocurrency, but you will not have access to the private keys.
Hot and Cold Wallets
When a cryptocurrency wallet is connected to the internet, it is referred to as a hot wallet, and when it is not, it is referred to as a cold wallet.
Many crypto wallets use a seed phrase, also called a mnemonic, recovery, or secret phrase, to generate the private keys because a phrase is fairly easy to write down and keep.
The phrase and keys are not tied to any particular program or device; you can access your wallet from a wide range of hardware and software wallets using the same phrase. Thus, somebody who knows the phrase can access the wallet and linked crypto funds, so keeping your crypto safe requires keeping the phrase and keys secret. Here are ten tips for securing a cryptocurrency investment.
10 Ways to Keep your Crypto Safe
- Use Crypto Wallet for Security
- Cold wallets have their cons for active traders
- Hot wallets offer convenience, but losses could be greater
- Learn about digital currency protection methods
- Two strong passwords are key
- Use Trustworthy crypto wallets, exchanges, brokerages, & mobile apps
- Avoid sharing the secret key
- Pay attention to your wallet’s transactions
- Avoid using wallets hosted by providers
- Keep yourself safe from mobile phishing
Use Crypto Wallet For Security
Online crypto wallets are becoming more popular, and hackers are paying attention to them. Most of a user’s cryptos should be kept in offline or physical wallets, while only a small amount should be kept in an online wallet.
The physical wallet should also be kept in a secure location, such as a secured deposit box. It is suggested that the private and public keys be kept separate. Password and multifactor authentication should be used whenever possible to protect both. You must protect your cryptocurrency until more traditional options become available.
Cold Wallets Have Their Cons For Active Traders
A cold wallet is completely offline and requires either writing down the private address on paper. Only the owner should have access to or purchase a physical device that securely stores crypto funds.
One downside is that it takes time to store your cryptocurrency. If you do a lot of trading, you may have to pay multiple withdrawal fees each time you move money between an exchange and a cold wallet. A cold wallet assures you that only you have access to your assets.
Hot wallets Offer Convenience, But Losses Could Be Greater
Hot wallets can be used by retail investors. It is a storage option that is always connected to the internet. Hot wallets allow for easier access and the ability to trade and buy other cryptos on platforms, such as Coinbase and PayPal.
The trade-off is security and giving up control of your public and private addresses to the platform, which historically has led to the loss of sizable sums of money after a successful exchange hack.
Active traders should consider using hot wallets, but the amount of funds they require access to should be consistently analysed. As the number of retail investors increases, cyber attackers will indeed target large exchanges. No matter if a platform is centralized or decentralized, it is likely to still be vulnerable to an attack if the investor doesn’t set up proper storage processes.
Learn About Digital Currency Protection Methods
People looking to diversify their portfolio but have insufficient technical backgrounds are becoming more interested in investing in cryptos. Since none of the digital assets is managed by an official organization or central bank, it is almost entirely up to the user to protect their money. The chances of recovering those losses are small. The three most important things to learn are how to protect the secret key, the recovery seed, and cryptominer malware.
Two Strong Passwords Are the Key
Passwords should never be reused across accounts, especially since crypto services are the main targets for hackers. While crypto is an innovative technology that is rapidly evolving, using tried-and-true security methods is the fastest and easiest way to secure your wallet. Use a different, strong password for each, and enable two-factor authentication and passcode rotation where necessary. The use of a reliable password manager can automate this procedure and remove the need for any guesswork.
Use Trustworthy Crypto Wallets, Exchanges, Brokerages, & Mobile Apps
Investors should closely inspect each platform’s security protocols to understand how their data will be kept safe. When storing crypto, agencies that can be trusted should use best security practices such as involving multifactor authentication, SSL/TLS encryption and using air-gapped devices that are kept offline.
Using multiple cryptocurrency platforms can be safer if owners use various, strong passwords for each platform. It is critical to use a secure password manager when using one or more crypto platforms to avoid password loss.
Avoid Sharing the Secret Key
The secret key is used to verify that the person sending or receiving digital coins is the owner of the wallet. This private or secret key should never be shared. Cold storage is the most secure method of storing your private key. Cold storage involves printing your key and erasing all digital traces of it.
Using a seed, which is a set of randomly generated words that a user can use, is a semi-safe way to get back your private key. Only write or print this seed phrase on paper and keep it somewhere safe. Keeping this phrase in a digital location is risky given how easily attackers can access end-user computers and other applications for digital storage.
Pay Attention to Your Wallet’s Transactions
Apply the “cyber resilience” core principles to your wallet. Any crypto wallet is a piece of data and code, but it is a crucial asset for you. Know how it is used in transactions, make sure no systems or networks are at risk if you are using them, and take precautions to prevent theft or loss.
Investors who trade higher numbers should take their time assessing the risks. There are carefully planned cyberattacks. Before attacking the main target (your wallet), they first establish a strong presence and grow. To what extent you comprehend the cybersecurity measures in place for your wallet will determine how effective they are.
Avoid Using Wallets Hosted By Providers
Bitcoin can also be stored in wallets on your pc or with providers. Provider-hosted wallets are the least secure option because they store your private key on their servers, which you have no control over. Because it requires the least technical effort, this is the most popular choice. This puts your private key at risk of a server breach, provider bankruptcy, or government or legal entity takeover.
Use a hardware wallet, which is a USB-based gadget that securely stores your private key and all other necessary information. The method used to decrypt them is often physical and is much safer than other methods.
Keep Yourself Safe From Mobile Phishing
Many crypto wallet owners use a mobile app to manage their investments. As the value of these assets rises, malicious hackers are attracted to target investors with mobile phishing campaigns to steal your login credentials. These cybercrimes can happen on a mobile device via texts, social media, third-party messaging platforms, or email.
Aside from phishing, malicious mobile apps can secretly log your keystrokes or monitor the activity on your screen. People have long been aware that they should protect their mobile devices with antivirus software, and this trend has only accelerated in recent years. Because we trust so much information to these devices, they are the most important to protect.
Conclusion
This article discussed the ways to keep your crypto safe as when you own crypto, it’s a serious thing to consider is how to keep your crypto safe. While crypto is not protected in the same way that money is in a bank account, it’s your job to store your crypto.
You can store crypto in a variety of ways, including hardware devices and online wallets. Remember to use the above-described ways and try to have a better understanding of each storage method, you can select the wallet that will keep your cryptocurrency safe.