6 Tips to Keep Your Crypto Wallet Safe and Secure
Cryptocurrencies like Bitcoin and Ethereum are undeniably high-value assets. Continued talks of their future value and project potentials are not only drawing millions of investors in, but a new wave of cybercriminals is also on the rise!
Using malicious techniques like ransomware and phishing, these hackers are finding vulnerabilities in the system.
Many reports of exchanges, wallets, and crypto custodians being hacked have made headlines. The most recent is the Poly Network Hack in August 2021. One of the largest crypto heists in history, where hackers made away with assets worth $610 million in value.
One Bitcoin may be worth more than an ounce of gold, but it's still only a few lines of code, which means it can be vulnerable to cyberattacks. Protecting your crypto assets is just as important as buying them!
A crypto wallet is an ideal and safe place to store crypto. But without proper security reinforcements, it too can become vulnerable to attacks. Knowing the best security measures for your crypto wallets will ensure your assets are safe and sound for many years.
Here are our expert tips on keeping your crypto wallets safe and secure.
Understand the Difference Between Custodial and Non-custodial Wallets
A non-custodial crypto wallet is a highly secure wallet with no third-party access. Your crypto is not in anyone's custody but yours. This means only you have the seed phrase and private keys to your wallet.
So if you mistakenly forget your keys, you won't be able to access your crypto. Custodial wallets can either be hot or cold storage. A hot wallet requires an online connection, making it less secure than a cold wallet that is offline.
A custodial wallet is a crypto wallet with third-party access. You do not own the private keys to this wallet. Instead, the third-party custodian does. An exchange wallet is a perfect example of a custodial wallet. Keeping your cryptocurrencies in an exchange may seem like a good idea because it is flexible, and you can trade them anytime you want.
But it may not be the best decision. This is because exchanges are
beacons for hacks. If an exchange is breached and the private keys
are stolen, you may lose your assets.
Blockchain.com and Coinomi are highly rated online wallets for mobile, while Exodus and Metamask are good choices for web-based wallets.
Use a Strong and Random Password
A helpful tip in making sure your crypto wallet remains safe and secure is, to use a strong and random password for your account. These days hackers organize data breaches just to get the personal information of users.
Then they make educated guesses formed from your data to figure out the passwords to your wallet. So if your password isn't totally random, you could get hacked.
Make sure to keep your passwords unrelated to your personal life. For instance, if your name is Jeffery Tuchel and you have 4 dogs, don't make your password "Jtuchel4". A Strong and random password would look like "Redbrowngrey!718" or, "Xwi733yes"
Also, once you have created a unique and random password for your crypto wallet, make sure to never use that same password twice.
Use a New and Unique Email Address
As mentioned earlier, when creating your crypto wallet, make sure to use a new email address and password you've never used before. This will ensure that if ever, your personal data is breached someday, your crypto assets will never be hacked.
For instance, if your social media accounts get hacked and you used the same email and password to register for your crypto wallet, it's only a matter of time until your crypto wallet gets breached and your crypto is stolen. Keep your crypto wallet information unique and hard to guess.
A general rule is to keep your financials log-in information unique from your social media and shopping user log-in information. This will add an extra layer of security to your bank and other financial-related assets stored online.
Activate Antiphishing Codes in Your Crypto Wallet
Phishing is an attempt by hackers to gain people's confidential information, such as passwords, personal data, or social security numbers. Phishing attacks are usually carried out with emails that contain links to fraudulent web pages.
These emails may look like it's coming from your bank or a website you visit regularly. In these scams, they ask you to update your payment information, thereby revealing your bank card info. Or they may ask you to log in to your bank. In such a case, you reveal your confidential login info, which they use to breach your bank accounts.
Crypto wallets provided by exchanges like Binance and Bitforex allow you to activate antiphishing codes to add an extra layer of security to your wallet and exchange account. This code will help you discern the real emails from the exchange from the phishing emails.
Tip 5: Set up Two-Factor Authentication - 2FA
Setting up two-factor authentication (2FA) for all of your crypto accounts is the next best thing! This extra layer of security will make hacking your wallet a lot more difficult.
2FA means a two-step verification. To access an account, the user has to pass two different authentication methods. So, even if your wallets' email and password are compromised, it will be difficult for hackers to produce the second step of verification, which is usually a security token, biometric, or mobile.
You can use the google authenticator app or any other like it to set up 2FA for all your wallets, bank accounts, and anything worth protecting online.
Do not Forget your seed Phrases
This tip is vital for those who have set up non-custodial wallets with their own private keys. Do not forget your seed phrases.
Seed phrases are a set of randomly generated words that give you access to your crypto wallet. Your crypto wallet provider generates these 12-24 unique words to give you access to your wallet. You can also use them to regain a lost crypto wallet and reclaim your funds.
The best way to store a seed phrase is to write them down on a piece of paper and keep it in a cool and dry place only you know about.
Security is vital when dealing with cryptocurrencies. It is almost
certain that, as cryptocurrencies stabilize and continue to
influence our world, cyberattacks will increase and become more
common. Practice these safe and secure tips to keep your crypto
holdings safe in your wallet.
This content should not be treated as investment advice. Cryptocurrency is a highly risky and speculative market.