Imagine having a wallet full of cash. Now, if you walk around with your wallet wide open, exposing your hard-earned money, it becomes an easy target for pickpockets. In the same way, having cryptocurrencies without securing them properly is akin to inviting digital thieves to come and get them. It’s a chance no cyber attacker will miss.
Storing your cash in a secure wallet, stuffed into your coat pocket and zipped up adds a layer of protection. Likewise, using hardware devices or a secure and encrypted wallet for your multi-currency account ensures that it’s not easily accessible to online thieves. In this guide, we’ll show you how to safeguard your crypto in 2023 appropriately.
Choose a Reputable Wallet
Much like a physical wallet for keeping fiat cash, crypto wallets are indispensable when it comes to storing and managing your digital assets. With the growing influence of cryptocurrencies, the number of crypto wallet types has significantly increased. For newcomers, navigating the vast sea of choices can be challenging and overwhelming.
There are two major types of crypto wallets:
- Hot Wallet
- Cold Wallet
Because they’re connected to the internet, hot wallets are ideal for frequent transactions and those needing to access their funds quickly. These types of wallets are suitable if you intend to keep smaller amounts of crypto. They can come in the form of:
- Desktop wallets
- Mobile wallets
- Online wallets
- Exchange wallets
The biggest advantage of hot wallets is that they’re entirely free. All you need to do is register and make sure you keep your private keys safe.
Unlike hot wallets, their cold counterparts are isolated from the internet and represent a form of offline storage. A cold wallet can be any hardware, from a USB drive to a CD, hard drive, paper or an offline computer, often referred to as Air-gapped. The most common types of cold wallets are:
- Paper wallets
- Hardware wallets
- Sound wallets
- Deep Cold Storage
- Offline Software wallets
These types of storage are better suited for those with large amounts of cryptocurrencies. They’re a bit more complex than hot wallets, so you won’t be able to transfer funds immediately.
Instead, the best practice is to take a portion of your crypto from the cold storage and transfer it to a hot wallet when making transactions.
Keep Your Software Updated
If you use wallet software, it is crucial to update it regularly. The same goes for related applications.
Every update includes security patches that address vulnerabilities of previous versions. Without regular updates, your software won’t have the latest security measures installed, which leaves room for cyber attackers to exploit vulnerabilities in your security network.
Your desktop computer, laptop, or smartphone, whichever you use to access your digital wallet, is equipped with an in-house security suite. This prevents viruses, malware, adware, ransomware, and other online threats from entering your system.
Updates are important as they keep your devices safe against the latest hacking techniques called zero-malware. By keeping your software up-to-date, you eliminate the risk of hackers exploiting unknown and unprotected vulnerabilities in your system.
Use Strong Passwords
Using strong passwords is a fundamental measure to protect your crypto assets stored on hardware or software devices. Passwords are typically the first line of defense against third parties attempting to gain unauthorized access to your digital wallets and accounts.
Your passwords should be as long as possible and contain a combination of capital letters, numbers, and symbols. This is especially helpful against brute-force attacks, an advanced script coded to systematically try every possible combination until the correct one is found. Increasing the complexity of your password is a great way to make your accounts resistant to force attacks.
Enable Two-Factor Authentication
Introducing two-factor authentication (2FA) can significantly contribute to securing your cryptocurrencies. It adds an extra layer of protection, making it more challenging for the attackers to gain access to your funds.
This is particularly useful in case the attacker has obtained your password. They couldn’t complete the login process without the unique code generated by a mobile app or sent via SMS. There are different types of 2FA you can use. Besides the mentioned one-time code and SMS, you can also include email verifications or hardware tokens.
Stay Away from Phishing Scams
Phishing scams are the oldest hacking trick in the book. Cyber attackers use deceptive tickets to trick users into sharing their personal information, credentials or bank details. There are several types of phishing scams, with two being the most common – impersonation and email phishing.
Attackers can use fake emails and messages or create websites to impersonate legitimate ones. Because of the visual similarities, victims often unknowingly share their details, which gives hackers access to their emails, social media, online banking or crypto wallet accounts.
Another way is sending emails that appear legitimate, which often contain urgent messages, fake invoices or requests for personal information, most commonly credit card details. Such emails typically include malware attached, which allows hackers to gain unauthorized access to your online banking account or crypto wallet.
For this reason, it is advisable for crypto owners to stay alert and be cautious about unsolicited communications. Always verify the source or the legitimacy of the request to prevent becoming a victim of cyber attackers.
Storing your funds safely is one of the most important aspects of crypto; otherwise, you risk losing them all. Knowing how to store cryptocurrencies significantly reduces the risk of becoming a victim of crypto thieves. There are multiple methods to protect your crypto wealth, starting with a safe and reliable crypto wallet.
Whether you choose hot or cold wallets should depend on the amount you store and the frequency of your transactions. Remember to keep your software updated, use strong passwords and 2FA. Finally, visit only legitimate websites and interact with verified sources only. This way, you’ll increase the security of your cryptocurrency and reduce the chances of becoming a hacker victim to a minimum.