The Best Security Practices to Safe Your Cryptocurrency
One important thing about cryptocurrencies is how to safely keep them. Your digital assets can be lost for many reasons: from hackers’ attacks at exchange where your assets are kept to the personal mistakes of crypto owners.
The sphere of cryptocurrencies is not strictly regulated yet. So you need to be especially careful when making crypto operations and being a member of crypto world.
In 2019 Bitcoin tended to grow again after its peak in 2017. So in the last years, we could see several big hackers’ attacks at the crypto exchanges as well as hackers attack private investors using different tricky methods.
So you decided to take control of your crypto assets and hold everything in a private wallet.
With great power comes great responsibility, and now it all rests on your ability to remain secure and keep your private keys private.
The ways of storage for your digital assets
Online wallets
One of the easiest ways to keep cryptocurrency is to store it in an online wallet. This option is not the safest, since the user trusts his funds to a third-party service, but this disadvantage is partially offset by simplicity and convenience.
Online wallets are divided into hybrid and traditional. The first method implies separate storage of keys using multi-signature, the second — private keys are stored on the service, and only a backup copy is available to the user.
The main advantage of hybrid wallets is that developers do not have full access to the user’s coins. Transfer from such storage will take place only with the participation of the client and the company. It is safer, but if you lose your secret phrase, you won’t be able to regain access to your funds.
Traditional online wallets are easier to use but less secure. Hackers can steal funds by hacking into an account or by creating a phishing page.
You need to be extremely careful not to store a large amount of cryptocurrency in your online wallet.
Crypto exchange
An even easier way to store cryptocurrency is on an exchange. When registering on the site, each user automatically receives a wallet. It supports all the coins that are presented on the exchange, they always (while it works) have instant access.
Among the advantages of this option is the ability to easily return access to your account and your cryptocurrency. However, exchanges have serious security concerns. None of the largest marketplaces are completely protected from hacks, and they all have at least once lost client funds as a result of hacker attacks.
Also, the platform may suddenly go offline for an indefinite period due to technical problems. At this moment, clients lose access to their cryptocurrency during work. In addition, you should always be extremely careful when choosing an exchange, as you can get caught by scammers.
Crypto exchanges are not suitable for storing large amounts of cryptocurrency. It is better to deposit exactly the amount of digital coins you need for trading. After that, it is advisable to withdraw the surplus to third-party wallets, mainly to hardware.
Hardware wallet
The safest way to store cryptocurrency is a hardware wallet. This device looks like a USB flash drive. They can also be compromised, but to do this, hackers need to gain physical access to the storage. If you keep it in a safe place, the risk will be minimized. However, one of the downsides to hardware wallets is the possibility of losing it or breaking it.
In 2019, a hacking of Binance, the largest exchange by trading volume, doubled the sales of Ledger devices. However, they also find vulnerabilities or errors in work. And in December last year, experts of the Kraken exchange found out that the KeepKey wallet can be hacked in 15 minutes, spending only $ 75 on it.
Local wallet
A more complex but versatile way to store funds is a local wallet. These are applications for PCs or mobile devices, browser extensions. Such a wallet can be downloaded from the official website of the project.
The mobile option is suitable for those who need constant access to their coins for transactions. The cryptocurrency will not be stored on the smartphone, it can be accessed only if the Internet is available. Even if the device is lost, digital money can be returned.
The Common Security Rules to Follow
The most common security steps to take are:
· Don’t keep cryptocurrency in exchange for a prolonged period or longer than necessary.
· Always enable two-factor authentication (2FA) function.
· If you go for a hardware wallet, choose a pin code which is hard to guess, and never put your 24-word recovery sheet online.
· Don’t boast of your crypto holdings publicly under your real name or identifiable address. Some burglars manage to steal crypto funds even if you keep them in cold (offline) storage.
· Trust only what you see on your hardware wallet screen and verify all the information on the device.
· Always assume that your devices can get compromised anytime, so always treat your computer or smartphone screen with caution.
· Be Aware Of Phishing Sites. Double-check the website address of an exchange or wallet, especially when you’re reconnecting. There’re many fraudulent sites that fully copy the real sites to take your login details.
· Your Wi-Fi Connection should be secure. Always use strong encryption like WPA-2 protocol. Even when you think you’re in a safe place.
· Separate Your Funds. Don’t keep all your crypto assets in one place. The best way to handle it is by using one or several cold storages for long-term holdings, and at least one hot wallet for trading and transactions.
· Double-check Crypto Addresses. Some malicious programs can edit and paste a wrong transaction address whenever you send a transaction. Typically, the new address belongs to an attacker. It’s better to be safe than sorry.
Now you’re aware of some ways to keep your crypto assets safe. Follow these tips trying to be accurate with your digital finances so they could increase and bring you efficiency.
