The cryptocurrency world is replete with boundless opportunities, but also pervaded with risks, particularly from hackers and scammers who target vulnerabilities to exploit them. Chainalysis has estimated that over $14 billion was taken from the world during 2021 alone through scams involving cryptocurrencies. Protecting your digital assets is no longer an option; it's a must.
This book will provide you with the 10 best practical recommendations on how to store your crypto securely and your investments safely.
Understanding Crypto Wallets
Prior to diving into tips, let's ensure we understand crypto wallets and their role in securing your assets. Crypto wallets store private keys required to spend your digital assets. There are two major types you need to know:
Hot Wallets (e.g., software wallets): Connected to the internet and convenient for multiple transactions but more hackable. Examples: MetaMask or Trust Wallet.
Cold Wallets (e.g., hardware wallets such as Ledger or Trezor): Storage in an offline environment that offers greater security, ideal for long-term storage.
Important point? Be aware of where and how your private keys are kept.
1. Use Strong, Unique Passwords
Your password is your first line of defense against a compromise. Use strong passwords for all of your crypto accounts, using a mix of uppercase letters, lowercase letters, numbers, and symbols. Some good practices of password management are:
Try to use at least 16 characters.
Never reuse the same password across several platforms.
Use password managers like Bitwarden or Dashlane to store and generate strong passwords.
2. Enable Two-Factor Authentication (2FA).
One of the easiest methods of keeping hackers at bay is turning 2FA on:
Utilize authentication apps such as Google Authenticator or Authy as an alternative to SMS for increased protection.
Hardware keys such as YubiKey provide even more protection for your accounts.
Tip: Use SMS-based authentication whenever possible, given the growing number of SIM-swapping attacks.
3. Use Cold Wallet Storage
A cold wallet, or offline storage, is less vulnerable to cyberattacks.
Examples of hardware wallets are Ledger Nano X or Trezor One.
Store your long-term holdings in cold wallets and store them physically safely (e.g., in a fireproof safe).
Whether you store Bitcoin, Ethereum, or other less well-known altcoins, cold wallets are the most secure.
4. Diversify Your Wallets
Never keep all your cryptocurrency within one wallet. The reasons why diversifying assets in various wallets are advisable are as follows:
Primary Wallets (Hot Wallets): Utilize these for frequent use with low balances.
Cold Wallets (Long-Term Storage): Utilize these for storing large holdings.
This diversification mitigates loss in the event of a hack on one wallet.
5. Secure Your Private Keys and Seed Phrases
Treat your private key or seed phrase as the "key to your vault." If someone obtains it, they now control your crypto.
Store them offline (e.g., on paper or metal backups).
Never keep your seed phrase in cloud storage or screenshot it.
You can use steel capsules like Cryptotag for additional ruggedness.
6. Manually Double Verify Wallet Addresses Before Sending
Cryptocurrency transactions are irreversible. It means that a minor mistake in the wallet address can see money sent to the wrong place.
· Always double verify recipient wallet addresses manually.
· Be wary of clipboard hijacking malware that alters copied addresses.
Pro Tip: Verify the first and last several digits of the wallet address before committing transactions.
7. Avoid Public Wi-Fi
Public Wi-Fi is a hacker's paradise for launching man-in-the-middle (MITM) attacks.
Use a VPN to enable secure use of the internet when making transactions outside the home.
Avoid accessing crypto wallets or making transactions on public networks.
8. Prevent Scams and Phishing Attacks
Hackers routinely employ phishing attacks to deceive users into divulging sensitive data. Here's how to keep ahead:
Be cautious of emails or social messages promising free crypto or urgent security patches.
Use official websites only to access exchanges and wallets.
Bookmark reputable websites to minimize the risk of accessing phishing pages.
9. Update Your Software Regularly
Buggy programs have vulnerabilities that hackers will anchor onto. Ensure that your apps and devices are updated with the newest versions.
Get regular updates on antivirus software, operating systems, and wallet software.
Auto-update when it's available.
10. Take Crypto Insurance
Should you be dealing with big crypto investments, insurance could give you extra protection.
Explore products such as Nexus Mutual or equivalents offering coverage against smart contract failure or hacking.
Although it is still an emerging market, crypto insurance can help to reduce financial loss.
Remaining Alert
Protecting crypto doesn't end with these steps. Cyber threats are constantly evolving. Remain proactive by:
Regularly monitoring accounts for suspicious behavior.
Keeping up with news about shifts in the security landscape.
Having a separate email address for crypto accounts that is not connected to other personal or financial data.
Secure Your Crypto Beginning Today
From cold wallet storage to staying clear of phishing attacks, securing your cryptocurrency takes knowledge of the cyber security environment and implementing efficient security practices. Don't wait until it occurs to you. Do it today.
It is your turn now. Enhance security today with these recommendations and begin taking the first step toward the security of your digital life.
