Cryptocurrency is still in its infancy. Digital currencies are unregulated by governments and aren’t controlled by central banks. Indeed, that’s part of their appeal. However, it also means that many people are left with no legal leg to stand on should their account be compromised. Here are some of the best ways to keep your cryptocurrency safe.
You first need to decide how you want to store your cryptocurrency. You’ll need a wallet of some description, but be careful and research the company’s reputation. There’s a growing number of companies entering the market, offering their own wallet, but some of these are malware in disguise. Go for a regulated exchange because it will have more safety features. In fact, do a Google search to find out how the company is performing and what online chatter says. But be wary that most are not audited by financial regulators.
The next decision to make is what type of wallet you need. You might be thinking of a physical wallet, but a cryptocurrency wallet is digital. The concept is the same, though – it’s somewhere to store your money. It’s common to use a password to protect your cryptocurrency, which is safe practice, but if you lose this password then you’ve also lost the crypto. There’s no recovery.
As such, you should back up your private cryptocurrency keys. Backup is all about redundancy. You should take backups regularly anyway, but the pertinent moments are whenever you complete a transaction. You might choose to store your backups locally on a hardware wallet and in the cloud, since multiple methods provide redundancy, but be conscious of the security implications of each method.
There are also many different types of wallet available. Hardware, software, paper, and so on. Each have their positives and negatives. Ideally, you should go for a cold wallet. This is a wallet which doesn’t connect to the internet, or at least doesn’t maintain a connection. Those which are always connected are called hot wallets, and they are at a greater risk of attack from hackers.
These cold, physical wallets often have a button that must be pressed by the user to confirm transactions. A hacker isn’t able to replicate that, but they are able to replicate keystrokes on a hot wallet.
Much like your regular cash, you shouldn’t keep your cryptocurrency in a single place. Should an exchange shut down or get hacked, your investment is at risk. Spread your load and minimize that risk; it’s more of a hassle to maintain, so keep your records in good order, but it’ll mean you’re more secure.
You should always complete your transactions across secure networks. Never do it via public Wi-Fi, since they can be monitored. You also can’t risk your computer being infected by malware, so don’t mix your personal system with the one you use for crypto.
Finally, it’s best to complete trades in small amounts. This is because cryptocurrency has a public ledger where everyone can see the transactions taking place. If you carry out a large transaction, you’re drawing attention and making yourself a prime target for attack.
What's the Safest Way to Store Cryptocurrency?
No comments yet. Sign in to add the first!