If you’re a cryptocurrency investor, you’ve probably heard of the story of Mr. Thomas. He was given over 7000 bitcoins as payment for a transaction, but he misplaced the piece of paper containing his password. He is just one of the numerous bitcoin owners who have lost fortunes by losing their private keys and passwords or letting them fall into the wrong hands.
In this article, we will discuss seven ways to keep your crypto wallet safe and secure. Follow these tips, and rest assured that your investments are safe!
Here are the Best Ways to Protect your Crypto Wallet-
1. Backup Your Crypto Wallet and Passwords
One of the best ways to protect your crypto wallet is to backup your wallet and passwords. Backing up a crypto wallet is similar to backing up your computer files. Since you don’t have actual files in your wallet, you need to backup your ‘private keys.’ Private keys are like wallet passwords because they help you authorize transactions on your account. In the same way that you want to keep your online banking information safe, you must keep your private keys safe. Many professional traders use password managers to back up their crypto passwords as they provide significant levels of security.
2. Use Two-Factor Authentication
Another way to protect your crypto wallet is by using two-factor authentication. Two-factor authentication (or ‘two-step verification) is an extra layer of security that requires you to confirm your identity before accessing your account. For example, most online banking platforms need you to enter your password, and then a code is sent to your phone. This makes it much harder for someone to hack into your account because they would need both pieces of information.
Similarly, many crypto wallets now offer two-factor authentication as an extra layer of security. This means that even if someone knows your private keys, they still wouldn’t be able to access your account without the second piece of information (usually a code that is sent to your phone). Setting up your two-factor authentication is an easy process. Still, it is beneficial as it protects your account from hackers or any individual who has access to your login details with malicious intent.
3. Use a Hardware Wallet
A hardware wallet is a physical device that stores your private keys. Even if someone knows your private keys, they would still need to have the physical device to access your account. Hardware wallets are one of the most secure ways to store your data because they are not connected to the internet. This means that there is no way for hackers to access them remotely.
The only downside of hardware wallets is that they can be lost or stolen, just like any other physical object. As long as you keep them in a safe place, they are much less likely to be lost or stolen than if you stored them on an online exchange or in a software wallet.
4. Create Strong Passwords
The most important thing you can do to protect your crypto wallet is to create strong passwords. Strong passwords are long, random, and contain a mix of letters, numbers, and symbols. They should be different from any other password you use, and they should not be easy to guess.
Creating strong passwords is important because if someone knows your password, they will be able to access your account and steal your cryptocurrency. There have been many cases of people losing their entire investment because they used an easily guessed password or reused a password from another site.
5. Keep your Private Key Secure
Akin your email ID password, a private key is a password for your wallet address. Just as you would share your email ID with individuals to receive communication, you can share your wallet address to transact with crypto tokens. But you would never share your email ID password with individuals. In the same way, a private key is used only to access your wallet and should never be shared with anyone else.
Treat your private key the way you would treat your password or bank PIN codes. To know more about crypto wallets, private keys and how to keep your credentials secure, read our article on it here.
6. Store your Assets on a Cold Wallet
Wait, what? Didn’t we just speak about Hardware Wallets? Aren’t they the same? Well, technically, yes and no. The purpose of a hard wallet is to store private keys.
A cold wallet on the other hand stores your crypto assets. A cold storage wallet is used to keep all of your coins encrypted in a piece of hardware that resembles a wallet. Cold wallets require both software and hardware authorization making them far more secure than traditional storage options.
Cold wallets are the safest because they aren’t connected to the internet nor do they don’t have anything to do with storage keys on a PC or a mobile. To know more about crypto wallets, and the pros and cons of cold and hot wallets, read our explainer on it here.
7. Trade with Regulated Brokers and Exchanges
According to a report by TechRadar in 2021, millions of dollars have been lost by victims of fake crypto exchanges. These are advanced fee fraud schemes that lure people to register on crypto exchange platforms with the promise of a considerable amount of cryptocurrencies.
When you are ready to start trading cryptocurrency, make sure to use a regulated broker or exchange. There are many scams in the crypto world, and it is essential to protect yourself from them. Regulated brokers and exchanges have to follow specific rules and regulations. This means they are much less likely to be involved in fraudulent activities. They also tend to offer more protections for investors, such as insurance against theft or losses.
Using a regulated broker or exchange is one of the best ways to protect your money when trading cryptocurrencies. Ensure that you do your research before choosing one to ensure that your funds are safe.
When it comes to protecting your crypto wallet, these are five of the best methods. While no method is perfect, using multiple layers of security will make it much harder for hackers to access your account. By following these tips, you can keep your cryptocurrency safe and secure.
These were some of the ways you must try to protect your wallets and keep them secured!
Overall, securing and managing your crypto assets can be daunting. In addition to the methods we have discussed, you can use regulated and secure crypto solutions platforms like Binocs to manage your portfolio, crypto wallets, and taxes, all in one place.
Binocs supports a wide range of top wallets in the crypto space to help you get a detailed view of various crypto transactions in your wallets. With Binocs, you can also get deep insights into the taxations you face for all your transactions.
Syncing your wallet with Binocs is just a step away!
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