7 best ways to secure your crypto
One of the most exciting applications of blockchain technology is the invention of digital currency also known as crypto.
The meteoric rise in the price and popularity of cryptos have swept across the globe over the last 5 years and everyone wishes to have a bite at its profitability.
But one of the main concerns in the mind of any incoming investors is the concern of keeping their precious hard-earned crypto coins in a safe and secure wallet.
To ensure that you don’t lose out on your crypto wealth to malicious hackers we have prepared the 7 best ways to secure your crypto.
One of the main problems with the security of cryptocurrency is that it’s not regulated by a central bank and is accepted readily by most governments across the world.
Hence once your account or wallet gets hacked and you lose money there is little chance you can make a complaint and retrieve your wealth.
Due to the lack of regulation and laws in the management of digital currency, it has been a ready target for malicious attackers who look to hack digital wallets and since the hackers can easily eliminate their digital footprint it makes tracking back the source of theft and recovery of stolen cryptocurrency nearly impossible.
However, we are here to smoothen your journey as a crypto investor and bring to you the 7 best ways to secure your crypto.
1. Hybrid approach to ensure digital wallet security
Keeping your digital currency or crypto in the only digital wallet may not be completely secure and hence using a hybrid way could save you from undue attention towards your crypto wallet having a high value of wealth.
We recommend crypto investors as part of a hybrid approach to maintain only a small portion of crypto wallets in online or e-wallets and keep the higher portion in a physical wallet.
A physical wallet could be a paper wallet which is a printout of public and private keys, usually as both a string of characters and as scannable QR codes, the keys are used for carrying out transactions in cryptocurrency.
The next step for securing your physical wallet should be to keep it inside a safe vault well protected and locked.
The e-wallet should also be secured using multifactor authentication and separating public & private keys.
It’s very important that one takes full responsibility to keep their crypto wealth safe.
2. Strong password policy for secure wallet
Crypto investors must always have a strong password policy to ensure the safety and security of their digital wallet storing crypto.
Some of the strong password policies we recommend reducing the risk of someone hacking your password or crypto wallet is
- Never reuse the password of your crypto wallet
- Never keep the password the same as any other password you might be using elsewhere. It helps reduce the risk of a hacker trying to hack your crypto wallet by first hacking the password you might use elsewhere.
- One must try to use a unique password that doesn’t concern any personal details of the user or family members as it can be guessed by the hackers or someone close.
- One can use a trusted password manager to automate the process of password management.
- Change your password regularly possibly once a month
- Never share your password with anyone
- Never write down your password in an unsecured manner, even if you maintain a password file or diary ensure to maintain its safety
- Try to maintain a multistep authentication instead of a simple password
- Enable biometric authentication or face lock for unlocking and locking crypto wallet apps.
- A study undertaken in the U.S showed more than 70% of millennials use a single password for most of their accounts. If the security of one account gets breached, it leaves the rest vulnerable to attacks.
3. Invest only through well-known crypto/ wallet/exchange/apps/brokerages
Apart from the plethora of cryptocurrencies to invest in a cryptocurrency investor must also have to decide on which platform/brokerage/app to use for carrying out their transactions in cryptocurrency.
Given the immense popularity and the humongous number of traders ready to invest in crypto, several apps/brokerages/platforms are providing lucrative offers to new investors to register and trade through their portal or platform.
One must not fall prey to the lucrative offers and add money to a platform for trading in crypto as it might turn out to be a fake app and you could be robbed of your precious money.
Before selecting the platform for trading in crypto one must carefully research each platform’s security, legitimacy, data privacy rules it follows and security practices it follows to keep your account safe and secure from any form of malicious attack.
One way to diversify the risk of a platform is to distribute your investments in multiple platforms meant for crypto trading and using complex, unique and different passwords for each.
4. Protection from Mobile phone Phishing
Most crypto investors carry out crypto investment and trading through their smartphones like any other activity.
It makes life easy as one can trade from anywhere in the world easily. However it also exposes an investor to the risk of Mobile phone phishing.
Hackers with malicious intent can try to steal your crypto wallet password through various messages and emails embedded with links that on being visited can capture the login credentials of various secure apps including your crypto platform.
One can be a victim of mobile phishing in various ways like text messages, e-mails, social media third party messages or posts, etc.
There could also be malicious apps that have hidden capability to record activities on your screen and hence capture login credentials of your digital wallet compromising the security of your cryptocurrency.
To avoid falling prey to any form of mobile phishing investors must be extremely cautious in downloading mobile apps and shouldn’t use any kind of unrated apps.
We recommend a separate mobile phone for carrying out any financial transaction which can significantly reduce the risk of falling prey to mobile phishing.
5. Regular monitoring of crypto wallet transactions
A crypto investor must regularly check and keep tabs on the transactions carried out through his/her crypto wallet to be vigilant against any illegitimate transaction.
An investor must maintain a separate record of the cryptocurrency he/she holds and match it regularly with data reflected in the app/platform.
6. Maintaining crypto in custodial wallet
One of the best ways to maintain the security of your cryptocurrency without much effort is to store your crypto in custodial wallets.
A custodial wallet is a type of digital wallet that stores your crypto through a 3rd party managed cold or hot wallet.
Once you buy any form of crypto it’s initially stored in a custodial wallet controlled by the crypto platform, however, some platforms do allow you to transfer it to your wallet.
Some of the advantages of holding crypto in a custodial wallet are:
Reduces the effort required by the investor in storing, and securing his/her cryptocurrency.
It’s easy to trade crypto through the custodial wallet.
One doesn’t need to worry about losing the wallet if the account is accessible investor can access his/her wallet.
7. Avoiding cold wallets and using hot wallets
One must avoid cold wallets if requiting regular trades to be made.
A cold wallet is basically the physical version of your crypto coins and requires either writing down the private address on a piece of paper that only the owner has access to or purchasing a physical device that securely stores cryptocurrency funds.
The major problem is the time and effort required to carry out regular trading and the incurrence of a fee to transfer funds between an exchange and the cold wallet.
But at the same time, it secures your crypto wealth as only you have access to its use.
A hot wallet is a less sure version of storing cryptocurrency and is basically a digital wallet storing crypto online which makes easy accessibility, easy trading, and no extra fee requirements.
However, given its level of security one must only maintain the crypto required for trading purposes in a hot wallet.
Conclusion…
Finally, we come to a close on the article explaining the 7 best ways to protect your crypto.
To recap a few essential points before we conclude one must understand due to the lack of regulatory bodies and laws involved in the management of crypto it’s not easy to get back money lost to some kind of hacking, hence one must take ownership in securing their investments in crypto.
We have discussed the 7 best ways to secure your crypto but would like to focus your attention on strengthening password policy and managing a major portion of crypto wealth in the cold wallet as the 2 best ways to protect your wealth in cryptocurrency.
Hopefully, you enjoyed reading it and would be able to implement some of the best practices in managing your digital wallets and keeping secure your investment in crypto. !!!
