As you delve into the world of cryptocurrency, you come to terms with the realization that investing your funds does not just mean buying crypto coins and then relax while you wait for profits, Nah.
You realize that a lot more effort is required to safely invest in cryptocurrency- including how to buy and store your crypto and, importantly, how to safely act against cyberattacks, cause hackers really be on the prowl today.
The Bitqt App is a great resource for buying and storing your crypto. It’s safe to use, especially for crypto traders; and profit is maximized.
Moving on, this article focuses on how to hold your cryptocurrency safely – including the best storage solutions and tips to avoid common pitfalls.
1. Take a Hybrid Approach to Digital Wallet Security
The popularity of online wallets have grown and it seems to have garnered the attentions of hackers. That’s one of the many for digital wallet security.
You can use offline or physical wallets to store the majority of your cryptocurrency; although, both should be secured with strong passwords and two-step verification when possible. As cryptocurrency becomes more mainstream, you are responsible for keeping your cryptocurrency safe.
You are the first and last line of defense.
2. Use Strong Passwords
Don’t ever reuse passwords for your crypto accounts, especially since cryptocurrency services are prime targets for hackers.
While cryptocurrency is an innovative technology that is evolving quickly, the quickest and easiest ways to secure your wallet is with tried-and-true security tactics. By having a unique, strong password for your accounts, you eliminate the possibility of a breach.
Using a trusted password manager can help to automate this process and take the guesswork away.
3. Work with Renowned Cryptocurrency Wallets, Exchanges, Brokerages and Mobile Apps
Before deciding which platforms to use, you should carefully research each platform’s security features to understand how your data will be protected. Look out for brokerages that incorporate the best security practices such as requiring multifactor authentication, SSL/TLS encryption and using air-gapped devices that are kept offline when storing cryptocurrency.
4. Protect Yourself from Mobile Phishing
Many people with a cryptocurrency wallet use a mobile app to manage it. As the value of crypto soar, malicious hackers are motivated to target investors, using mobile phishing campaigns to steal your login credentials. These social engineering attacks can come from anywhere on a mobile device, including texts, social media, third-party messaging platforms or email.
Also, watch out for malicious mobile apps that have the hidden ability to log your keystrokes or watch the activity on your screen. Installing antivirus softwares on your mobile device and computer is one way to guard against this threat.
5. Beware of How Your Wallet is Used in Transactions
When it has to do with your wallet transactions, beware of how it is used in transactions. Be sure that systems and networks are not compromised if you are using them for transactions.
If you trade higher values, you’d do well to guard against this because the prime target is your wallet.
The cyber protections applied to your wallet are only as good as your understanding of them.
6. Understand the Different Methods and Processes to Protect Your Digital Currency
Interest in cryptocurrency continue to rise in popularity with people who do not have a technical background but are seeking to diversify their portfolio. They’re not fully aware that the responsibility to protect their money falls almost entirely on them.
To be on safe grounds, these are the three most important components to learn: secret key protection, recovery seed protection and cryptominer malware protection.
7. Avoid Sharing the Secret Key
The secret key is a means to validate that the person sending or receiving the digital coins. This secret or private key should never be shared.
The safest way to store your private key is by using cold storage. Cold storage essentially means printing out your key and removing all digital traces of it.
If you lose that, then the semifail safe method of recovering your private key is to use a seed, a series of randomly generated words that a user can leverage.
This seed phrase should only be written down or printed on paper and stored somewhere safe. Note that, keeping this phrase somewhere digital is very risky.
8. Skip using Wallets Hosted by Service Providers
Crypto wallets can be hosted on your computer as well as by service providers. Using wallets hosted by service providers are the worst choice because you’d be allowing them to store your private key on their servers which are totally out of your control.
This is the most common choice because it requires the least technical effort. Taking this action places your private key in a lot of risks, including if there happens to be a breach in the provider’s servers, the provider going out of business or even a takeover of the infrastructure by a government or other legal entity.
Useing a hardware wallet, which is a USB-based device that encrypts and stores your private key along with all other relevant details is the safest guarantee.
The method to decrypt a hardware wallet is sometimes physical but it is much safer compared to other methods.
9. Cold Wallets have their Drawbacks for Active Traders
A cold wallet functions entirely offline and requires either writing down the private address on a piece of paper that only the holder has access to or purchasing a physical device that securely stores cryptocurrency funds.
The drawbacks include the time required to store your cryptocurrencies, and if you are engaged in trading activity, the process of consistently transferring funds can incur repetitive withdrawal fees. The benefit of a cold wallet includes an awareness that only you have access to your funds.
10. Hot Wallets are More Convenient for Traders, but Losses Could be Greater
Hot wallets are storage options that is connected to the internet at all times.
They facilitate easier access and the ability to trade and buy other cryptocurrencies conveniently; examples of hot wallets are Coinbase and PayPal.
Historically, using this method in the past has resulted in the loss of significant funds following the successful breach of an exchange. Of course, it’s a lot safer to use this method now, but this scenario should only be considered by active traders.
Note that; if you do not implement proper storage processes, you are likely to remain at risk of a potential cyberattack.