The security factor of cryptocurrencies and blockchain-based technologies is one of all their most famous claims to fame. However, over the past many years, there have been many cases of traders and investors losing their hard-earned cryptocurrency assets, for a variety of reasons.
Your crypto wallet may be under better need of protection in case criminals target your savings, you get entrapped in a phishing scheme, or are guilty of poor personal key management. So, how to keep crypto safe? Let’s find out in this blog post!
What is a Crypto Wallet?
Starting out with the basics: what is a crypto wallet? An app, service, or physical wallet like a USB stick that holds public keys and private keys and keeps your cryptocurrency safe and secure is called a cryptocurrency wallet. When conducting cryptographic transactions, you can encrypt and decode them using these keys, which are strings of complex letters and numbers.
No central controlling body, such as the federal government, the central bank, or an insurance company, issues or insures cryptocurrency wallets. A public key is comparable to a username for a bank account, and a private key is comparable to a PIN or password. You must protect your private key well, or your entire wallet risks being stolen in a matter of seconds.
How do Crypto Wallets Work?
Before knowing how to secure cryptocurrency or how to secure crypto wallets, you need to know how they work. Cryptocurrency isn’t actually kept “in” a wallet. The wallet program enables you to communicate with the balances kept on the blockchain, where the coins are really stored.
The wallet itself stores addresses, enables its owners to transfer money to new addresses and makes it possible for others to view the balances kept at each address. Some cryptocurrency wallets also offer the ability to switch between tokens, stake tokens for a defined return given to users, and access decentralized applications developed on several networks.
What are some Types of Crypto Wallets?
So now you know ‘what is a crypto wallet?’ What are some types of crypto wallets out there, however?
Non-Custodial Vs. Custodial
You have complete control over your private keys while using a non-custodial wallet, which in turn allows you to manage your cryptocurrencies and provide ownership proof for any funds.
Your private keys are accessible to others through a custodial wallet. In other words, you’re putting your faith in a third party to look after your money and give it back to you if you decide to trade or send it somewhere else.
Hardware Vs. Software
Private keys are kept in a physical wallet called a hardware wallet. A file contains a string of numbers or letters that serves as a private key.
On the other hand, a software wallet is a sort of cryptocurrency wallet that is kept locally on the desktop or hard disc of your computer.
How to Secure Crypto Wallets?
Now, coming to how to secure crypto wallets. Users need to recognize that their wallet or exchange, not the blockchain, poses the most risk to their cryptocurrency. One bit of information that the provider can keep track of and store on file is your private key. Your savings could be stolen if hackers get access to this.
As more individuals use cryptocurrencies, there is an increase in competition among the many digital wallets. It’s important for users to choose their wallets carefully because of this.
What to Look for in a Crypto Wallet
You will need crypto wallets to keep your cryptocurrencies if you intend to purchase, trade, or invest in them. A crypto wallet is different from a conventional wallet even if they both perform comparable tasks. As we discussed before, what is a crypto wallet is a tool for storing your cryptocurrency ownership proof, either physically or digitally. It doesn’t hold actual coins and cash like a typical wallet does.
Instead, it safeguards the public and private keys necessary for transferring and authenticating your cryptocurrencies. While some cryptocurrency exchanges provide wallets, customers can also select their own software or hardware wallets.
Investing in Crypto Prudently
Growing options for investors and tech-savvy people to invest money in new areas of interest are presented by the maturing crypto marketplaces. However, a crucial element of any investment strategy is knowing exactly what you are entering into and how to reduce risk. The crypto markets are also rife with jargon, like “gas fees,” “non-fungible coins,” “hodl,” and many others.
It takes virtually a full-time job to securely traverse the complex world of cryptocurrencies, particularly the abundance of new coins and initiatives. Knowing how to secure cryptocurrency you own is absolutely integral.
How we Choose the Best Crypto Wallet
Before picking a crypto wallet for yourself, you’ll need to consider several aspects, such as security and convenience, to determine which cryptocurrency wallet is best for your needs. You should also become familiar with the various choices and discover the truth regarding how crypto wallets operate.
Before considering which crypto wallet to select, like with any new technology, decide which type is ideal for you. If you only need to store a little quantity of cryptocurrency or require a wallet that you can share with another person, go with a hot storage wallet (one that can be accessed online).
How to Keep Crypto Safe: 10 Tips to Secure Cryptocurrency Against Hacks
Hackers target cryptocurrency exchanges and wallets with advanced tools and methods. Here are our top ten suggestions for keeping your cryptocurrency wallets safe and lowering the likelihood that they will be compromised:
1. Use a cold wallet first (an offline wallet)
2. Use security measures like two-factor authentication (2FA)
3. Keep your seed phrase in a safe place
4. Constantly change your password and use a strong one
5. Maintain several wallets for your investments, if you have a sizable holding in crypto
6. Be wary of cryptocurrency fraud through social media sites, instead of being driven by FOMO, examine a project by yourself
7. Be on the lookout for phishing assaults
8. Connect to the internet securely
9. Verify the wallet address of any recipient twice
10. Use antivirus software that is up to date
How often do Crypto Wallets get Hacked?
When considering how to secure crypto wallets, it makes sense to be concerned about the security of any place where you put money; banks, for instance, are typically thought to be secure. However, beginners in crypto might worry that their carefully earned crypto could be taken by malevolent hackers. It is possible to hack exchanges and make off with cryptocurrency, just like with almost anything else on the internet.
Very recently, using a flaw in the Poly Network protocol, hackers were able to steal cryptocurrencies valued more than $600 million in 2021. Crypto-related hacks do happen quite often, and ultimately it comes to you, the user, to protect your assets to the best of your abilities.
How to Secure Cryptocurrency?
Prices for cryptocurrencies are rising, and many people are purchasing them for the first time. However, while investors see this as a fantastic opportunity, so do hackers, con artists, and other criminals who view these new investors as easy targets. While there are several problems to watch out for when investing in cryptocurrencies, keeping your money secure is unquestionably a top priority.
Making sure you buy your cryptocurrency securely first, and then enabling two-factor authentication (2FA) for withdrawals on your exchange app are two of the simplest defenses against these assaults.
Cryptocurrency exchanges may be incredibly beneficial, but they are also tempting targets for criminal hackers. You should keep your cryptocurrency in a private, safe, and offline wallet if your holdings are great. We do hope this blog helps you understand how to secure crypto wallets and how to keep crypto safe!
How to Keep Crypto Safe: Frequently Asked Questions (FAQs)
1. What are the Best Crypto Wallets?
The ideal cryptocurrency wallet should support a wide number of currencies and tokens and be simple to use. Hot wallets ought to offer multiple signatures and two-factor or multi-factor authentication while levying little or no costs. To make trade easier, cold wallets ought to be accessible at a fair price and supported by a range of hot wallets.
2. Which Crypto Wallet has the Lowest Fees?
Among the many available out there, the Coinbase Wallet is famous for having the lowest fees in the ecosystem of cryptocurrency wallets, and it’s quite easy to use for beginners as well.
3. How do I Buy a Crypto Wallet?
After selecting the ideal wallet for yourself, you can sign up with the exchange or software wallet provider of your choice to get started.
4. What is the Safest Crypto Wallet?
If you don’t frequently exchange your cryptocurrency, you can keep them in a hardware wallet offline (a “cold wallet”), as it is the safest alternative. Since the wallet is offline, you don’t need to worry about malware or hackers accessing it, except for when you’re connecting to the internet for a trade.
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Last Updated on August 31, 2023