Cryptocurrencies have come a long way as an investment but the same can’t be said for their security that has remained to be a major challenge. According to Slowmist, over $13 billion of crypto assets have been lost to cybercriminals and hackers.
This staggering figure underscores the need to ensure your crypto assets are stored safely always. So, how can one go about it? In this article, we walk you through some of the best tips to help you store the virtual assets securely at all times.
Best practices to keep your cryptocurrency secure
1. Only work with custody providers and a trusted exchange
Let’s say you’re wondering how to buy Ethereum or some other cryptocurrency safely, your best bet is to go through a regulated & licensed crypto exchange. Your funds are safer with an established provider or exchange that has a proven track record in financial security than with a small exchange.
Highly reputable exchanges guarantee you top-notch security as financial regulators approve of them. Besides, exchange licenses are extremely hard to come by nowadays. Choosing to use such trusted exchanges that are licensed therefore gives you peace of mind.
2. Familiarize yourself with the different crypto wallets
If you are going to get in on crypto, you will need a crypto wallet. Crypto wallets allow crypto users to store all of their coins, whether they are Bitcoin, Ethereum, or Ripple. There are different types of wallets today, each with different features, security levels, and risks. These wallets are broadly categorized as either cold or hot.
Cold wallets are those that aren’t connected to the internet. These include hardware wallets and offline paper wallets. Examples of hardware wallets are Ledger and Trezor. Hard wallets are generally considered secure as they are offline (no risk of being hacked) and protected by a private key. Nonetheless, they’re still vulnerable to being stolen, lost, or damaged.
Hot wallets are connected to the internet and usually online. As such, have an inherent risk of cyberspace criminality. These include online cloud wallets and soft wallets. Some of the popular cloud wallet examples are Metamask and Coinbase. Examples of software wallets are Jaxx, Exodus, and Electrum are the software wallets.
3. Enable two-factor authentication (2FA)
Two-factor authentication has grown to become a sought-after trend and a good one at that. This authentication method requires that users go through two layers of identification when accessing their accounts. The main advantage of 2FA is that it adds a layer of extra security, which prevents cybercriminals from getting illegal access to your assets.
Two-factor authentication is an indispensable feature of any good crypto wallet. With 2FA, your assets remain safe even if a hacker obtains one identification element e.g. password. The second identification piece is often a human element like a fingerprint or face ID that is much harder to obtain.
4. Use strong passwords
The majority of people use similar passwords for different accounts, from social media to business. While it may seem convenient, it is not – it is actually risky. Today hackers can use intelligent hacking tools to come up with potential password combinations for your account.
Weak passwords i.e. those with only letters or numbers, can be cracked easily. The best way to avoid falling victim to such incidents is to set strong passwords and use different passwords for your accounts.
5. Avoid carrying large amounts of crypto in a mobile wallet
Crypto wallets come with an additional benefit of convenience as they allow you to make trades quickly. However, storing all your crypto amounts in these wallets is not advisable. Only hold the amount you need to make purchases at a time. If you are a crypto trader that frequently transacts large amounts of crypto, it is best to choose a wallet that has kn0w-your-customer guidelines.
6. Limit the authorized devices with access to your wallet
Don’t allow too many devices to have access to your wallet. It is recommended to only use a dedicated device when accessing funds in your account. This way, you lower the risk of malware attacks while keeping your funds safe.
Crypto crimes such as phishing and hacking have been on the rise this year. This is why it is imperative to keep your crypto assets safe. Regardless of the wallet, you choose to use, always ensure it has extra layers of security. Keep in mind that the security of your crypto funds is your sole responsibility.