Cryptocurrency is an asset having a brilliant reputation in our world today. Thanks to its-ever increasing value, they have become targets for hackers and scammers. With the recent surge in crypto prices, many investors have little to no knowledge on how to keep their funds safe. Hence, they become victims to hackers who steal away their coins and do nothing about it. In this article, you shall learn how to keep your crypto funds most securely.
- Do Not Use Exchange Wallets
Using an exchange wallet is not a viable option for many crypto investors. Why? You are not in full control of your funds. Exchange wallets are not like your bank accounts where safety is guaranteed. The exchange owns the public and private keys to your wallet address, thereby not making it fully yours. Besides, using exchange wallets make your finds vulnerable to hackers who attack exchange platforms. In any event of any cyber attacks, you can lose all your coins if kept on the exchange platforms. Although these exchanges offer insurance and other forms of account protection, it is best advised to move your funds to your private wallets. These private wallets give you full control and access to your funds.
- Hot Wallets
Hot wallets are also called online wallets. They are wallets that operate on devices such as mobile phones, desktop computers, tablets, and more. Online wallets can be advantageous in many ways but they are also vulnerable to attacks. How? These wallets are connected to the Internet and become vulnerable to cyber-attacks. Besides, the wallet generates private keys to your coins on the used device. Therefore, anyone can have access to your wallets as long as he has access to the details of your device. It is therefore important not to store a large number of cryptocurrencies on these wallets for security reasons.
- Cold Wallets
Cold wallet, also known as offline or hardware wallet is one of the safest options in storing your cryptocurrencies. It is not connected to the Internet and has a little chance of being compromised by hackers. It stores the user’s address and private keys on software that is not connected to the Internet thereby, reducing the chances of theft. It also comes with the advantage of allowing users to view their portfolios without putting their private keys at risk. If you intend to store a large number of cryptocurrencies, using a cold wallet will be the best option for you. These wallets come in two forms which include:
- Paper Wallets
Paper wallets are offline wallets that allow you to store your coins off a certain website. This wallet generates your private and public keys by printing them on a piece of paper. This piece of paper is the only resource that connects you to your coins. Therefore, storing it in a safe location is a wise decision. You can laminate such paper and keep it in a safe or safety deposit box for security reasons.
- Hardware Wallets
Hardware wallets are USB devices that store your private keys in the neat possible way. It allows users to view their portfolios without putting their private keys at risk. One main advantage of hardware wallets is that it is not affected by viruses or vulnerable software. Besides, it is open source as it allows users to determine its level of safety rather than allowing a company to declare that. Examples of these wallets include Ledger Nano X, Ledger Nano S, Trezor wallets, and more.
Tips For Storage Of Crypto Funds
Computer failures do occur a lot. In situations like this, recovering your finds can become difficult if you fail to backup. With backups, you can store your funds on multiple locations such as USB, CDs, and more. When you backup, you can recover your funds anytime you want. However, you have to set a strong password for your backups to prevent thefts or other forms of attack.
- Software Updates
Software updates enhance the security system of your devices. A non-updated software becomes a soft spot for hackers and other cybercriminals. However, an updated version of your wallets keeps your coin safe and secure. Should a big crisis occur, the latest security protocols can protect your account from being accessed by hackers. Therefore, you have to regularly update your software, mobile devices, or computer operating system for enhanced protection.
In recent times, multi-signature has become popular to many users. It involves seeking approvals from more than one person to allow a transaction to take place. With multi-signature, you can decide on the number of individuals who can allow a transaction to take place. However, transactions can’t take place unless other members of the group approve of them. This way, you reduce the occurrence of thefts or other attacks.
- Remember Your Passwords
Passwords are the keys to your wallets. They give you access to your coins when you need them. Therefore, it is important to note them down somewhere. If you can’t remember it, write it in a private journal and store it in a safe location. Also, you can engrave it on materials such as walls, crafts, and more. Many individuals have lost their funds because they couldn’t remember their passwords. Do not become one of them so as not to get yourself in an uptight situation.
In storing your crypto funds, always determine the one that perfectly suits your needs. If you want a wallet that can allow you to quickly make some transactions, go for hot wallets. However, ensure you have a small amount there. On the other hand, if you have a large number of cryptocurrencies, using a cold wallet will be a decision. Therefore, choose the ones that suit your needs and follow the tips.