In recent years, a record number of users have flocked to purchase Bitcoin, Ethereum, and a variety of altcoins to build investment portfolios and embrace digital finance. However, the digital nature of tokens has made it difficult for many users to hold their cryptocurrency securely.
Unfortunately, the cryptocurrency ecosystem has been plagued by security flaws for quite some time, with hackers identifying digital tokens as a prime target for stealing the assets held by their rightful owners. Exchanges commonly use wallets as a means of storing cryptocurrency safely. MetaMask, Trust Wallet, and Gemini are only a few of the many wallet apps available for smartphone and desktop users.
Wallets for cryptocurrencies function similarly to physical wallets in that they are a place to store your assets. However, many crypto wallets can also convert your currencies and securely facilitate electronic transactions. In the early years of the cryptocurrency ecosystem, security has been a significant issue, and hacks have become prevalent across exchanges.
Also read: Why Create Blockchain-Based Cryptocurrency Wallets, And How?
Cold Storage
There is a no better way to safeguard your cryptocurrency assets than by using a ‘cold’ wallet. In a nutshell, cold wallets are hardware not connected to the internet, meaning that your portfolio cannot be stolen online. Cold wallets store a user’s address and private key on a drive that is not connected to the internet. They frequently include software that allows the viewer to view their portfolio without exposing their private key.
Additionally, it is possible to create a paper wallet, arguably the most secure method of cryptocurrency storage. You can create a paper wallet by printing your public and private keys on a piece of paper on specific websites. This makes it impossible to access your cryptocurrency unless you possess the paper. Some cryptocurrency holders laminate their paper wallet keys and store them in a safety deposit box at their local bank for added security.
If you wish to adopt the most secure method of cryptocurrency ownership, you should research the available hardware-based wallet providers. However, it is crucial to avoid losing your cryptocurrency wallet and, consequently, your cryptocurrency, as some investors have learned the hard way.
Embrace VPNs When Online
The timeline of cryptocurrency hacks over the past seven years demonstrates that holding cryptocurrency online can be risky. However, it is also useful for users who intend to trade and hold their assets for a brief period.
Moreover, for less experienced cryptocurrency investors, utilizing built-in wallets on major exchanges such as Coinbase and Binance can be much simpler.
Even if your assets are stored online, keeping them as secure as possible is still possible. Using a virtual private network before making a transaction or logging into your wallet can be an ideal way to add that crucial layer of protection.
Even though many exchanges claim to have high-quality encryption in place, the industry’s track record of fending off threats is, to say the least, inconsistent. By utilizing one of the online no-logs VPN services, you can trade with confidence even in public WiFi hotspots, knowing that nobody will be snooping on your assets.
Some crypto wallet applications, such as Samourai Wallet, are designed to provide superior levels of anonymity and privacy. The wallet does not reuse addresses and supports financial management via Tor and VPN.
Do Not Share Your Passwords
Three-quarters of millennials in the United States use the same password on over 10 devices. That’s a lot of distribution, and if one of those devices falls into the wrong hands, it could cause tremendous damage.
Keeping this in mind, using unique passwords for each wallet is prudent. Although creating longer passwords with multiple special characters can be inconvenient, it is far preferable to risk losing your wealth through compromised accounts. In addition, if something doesn’t feel quite right or if you’ve been using the same password for several months, be sure to generate a new, unpredictable phrase.
Additionally, use two-factor or multi-factor authentication where applicable.
Stay Vigilant on Phishing
The simplest way for hackers to gain access to your wallet is through phishing attacks, which trick you into entering your password or private key on a spoof website.
You must remain vigilant when entering personal information on websites you cannot completely trust. Always double-check before entering information into a website you accessed via a link you don’t typically use, and always check the URL of the site requesting login information.
Fortunately, the cryptocurrency ecosystem is rapidly maturing, and the industry’s transition to mainstream adoption has increased resistance to attacks. However, you must always remain vigilant and look for ways to safeguard your assets. Investing in cryptocurrencies has always been thrilling without the risk of losing your coins. However, thanks to cold wallets and VPN encryption, it’s much simpler to enjoy the excitement of cryptocurrencies without the risk of losing your assets.
Verify the Destination’s Address
One of the difficulties cryptocurrency users face is that if they enter the wrong address, the funds may be lost permanently and irretrievably.You should always triple-check the recipient’s address before sending payment. There are also malicious programs that can alter a simple “copy and paste” procedure, so you paste the bad actor’s address instead.
A common method of ensuring the security of a transfer is first to send a micropayment and then the full amount.
Avoid Storing a Substantial Amount of Your Cryptocurrency on Exchanges.
While many market-leading exchanges are considered safe and even have insurance, it is never a good idea to store most of your cryptocurrency on an exchange.
You should never keep more money on an exchange than you need for trading because your funds are effectively lost if it is hacked. Numerous prominent exchanges, KuCoin being the most recent, have already fallen victim to hackers. In addition to exchanges being hacked, your cryptocurrency may be at risk if the company that operates the platform is subject to law enforcement.
Conclusions
Maintaining the value of the cryptocurrencies you possess should most likely be your top priority. Suppose you do not believe that your crypto operations are extremely protected. In that case, you should start improving the security of these operations as soon as possible by taking action and devoting your time to doing so. Make sure you get in touch with the most reputable crypto wallet development company if you run into any problems with the safety of your cryptocurrency wallet. They will provide you with a solution tailored to your specific problem.
