As the popularity of cryptocurrency continues to rise, so does the need for increased security measures. The decentralized nature of cryptocurrency means that there is no central authority to regulate transactions, which can make it vulnerable to cyberattacks and theft. Ensuring the safety and security of your cryptocurrency holdings is crucial, especially if you’re in the early stages of developing a diverse and balanced investment portfolio. That’s why, in this guide, we’ll be discussing eight of the best practices for keeping your crypto safe and secure.
Choose a Secure Wallet
A crypto wallet is a software program designed to help you store your private and public keys, that interacts with various different blockchains to enable you to send and receive digital currency. There are different types of crypto wallets, including hot and cold wallets. Cold wallets are held offline and offer great security, while hot wallets use the internet and can therefore be more vulnerable to hacking and theft. Hardware wallets like Ledger and Trezor are popular options for cold wallets, while software options like Exodus and MyEtherWallet are popular hot wallet choices.
Remember, the platform you choose to hold your wallet on will also play a big factor in how successfully you trade and store your currency. For instance, a platform that offers the ability to easily calculate your Satoshi to USD figures can make a big difference when it comes to how simple it is to work out how much you want to buy, hold or sell.
Use Two-Factor Authentication
There are a number of two-factor authentication (2FA) services on the market that offer an extra layer of security. They require the user to provide two forms of identification before accessing an account. Most crypto exchanges and wallets offer 2FA options, such as a password and a code sent via text message or an authentication app. Enabling 2FA greatly reduces the risk of unauthorized access to your accounts, and lets you trade worry-free.
Avoid Phishing Scams
Phishing scams are attempts by hackers to steal cryptocurrency from unsuspecting users. Most of the time, they try to do this by creating fake emails or websites that appear to be from a legitimate source, before tricking users into providing their private keys or login credentials. To avoid falling victim to phishing scams, be cautious when clicking on links or downloading attachments from unfamiliar sources. Always double-check the URL of a website and be wary of emails that ask for your personal information.
Keep Your Private Keys Safe
Your private key is a secret code that is used to access your cryptocurrency holdings – if someone gains access to your private key, they can take all your currency. It’s crucial to keep your private keys safe and secure, and one way to do this is by storing them in a cold wallet, but you can also use a password manager to store your private keys securely.
Implement Cold Storage
Simply put, cold storage is the practice of storing your crypto offline, such as on a hardware wallet, like we mentioned earlier, or a paper wallet. This method offers greater security than online storage but can also be less convenient, as it takes longer to access your funds. It’s therefore important to weigh up the benefits and limitations of cold storage before deciding whether it’s the right choice for you. If you’re planning to hold your crypto for a long time, the impact of cold storage holding might not be detrimental to your overall investment approach, but if you plan to trade often, you might find that you need quick access to your funds.
Regularly Update Your Software
Keeping your software up-to-date is crucial for crypto security. Software updates often include security patches and bug fixes that can help protect against cyberattacks. Make sure to regularly update your wallets, exchange accounts, and other crypto-related software to ensure that you’re always maximizing the security measures available to you.
Use a Strong Password
Creating a strong and secure password is vital if you want to protect your crypto accounts. A strong password should contain a mix of upper and lowercase letters, symbols, and numbers. You should also avoid using personal information or any commonly known phrases in your password, as this can easily be acquired by seasoned hackers.
Be Cautious with Public Wi-Fi
Public Wi-Fi is a popular target for hackers, as it is often unsecured and vulnerable to cyberattacks. Therefore, it’s advisable to only use your private Wi-Fi to make crypto transactions. However, if you do need to use public Wi-Fi, be sure to use a VPN to encrypt your data and protect against potential cyber threats.
Securing your cryptocurrency holdings is crucial to avoid losing your investment to cyber criminals, and by following these eight best practices, you can keep your currency safe and secure, to enjoy the benefits of crypto without the risk of losing it all. Remember to combine your security measures with a reliable platform, and regularly utilize free resources to learn more about the potential risks, and you’ll have an exciting portfolio in no time.